USA Rare Earth (USAR) M&A announcement summary

Deal rationale and strategic fit

• Acquisition creates the only scaled producer of all four magnetic rare earths outside Asia, integrating a mine-to-magnet platform across three continents and reducing Western reliance on China and Asia for critical materials.

• Strengthens Western-aligned supply chains for rare earths vital to energy, defense, and technology sectors, addressing urgent supply chain needs after Chinese export controls.

• Supported by U.S. and French government partnerships, with strengthened relationships with government agencies and allies.

• Adds experienced mining executives from Serra Verde to the board and executive team, enhancing operational expertise.

• Complements existing assets and accelerates the strategic vision to build a global rare earth champion.

Financial terms and conditions

• Transaction valued at approximately $2.8 billion, comprising $300 million in cash and 126.849 million newly issued shares, with an implied equity value based on a share price of $19.95 as of April 17, 2026.

• Existing shareholders will own 66% of the combined company; Serra Verde legacy shareholders 34%.

• Pro forma liquidity expected to be about $3.2 billion post-transaction, including $1.2 billion in cash and $1.8 billion in milestone-based liquidity.

• Serra Verde secured $565 million in financing from the U.S. International Development Finance Corporation for expansion.

• Closing expected in Q3 2026, subject to regulatory and shareholder approvals.

Synergies and expected cost savings

• Projected annualized run-rate EBITDA of $550–$650 million for Serra Verde by end of 2027; combined company targeting $1.8 billion EBITDA by 2030 with 80% free cash flow conversion.

• 15-year, 100% offtake agreement with a U.S. government-backed SPV includes price floors, de-risking cash flows and addressing volatility.

• Integration enables end-to-end expertise from mining to magnet making, enhancing operational efficiency and reducing supply uncertainty.

• Opportunity for significant operational and financial synergies, including lower separation costs and hedging against price increases.

• Platform enables upstream scalability and downstream market reach, including potential doubling of mine production.