USA Rare Earth (NASDAQ:USAR) has announced a definitive agreement to acquire Serra Verde Group for a total consideration of approximately $2.8 billion.
The transaction, which is expected to close in the third quarter of 2026, marks a transformative step in USAR’s strategy to build a vertically integrated domestic supply chain for the rare earth elements essential to electric vehicles, wind turbines, and defense technologies.
The deal is structured with a $300 million cash payment and the issuance of 126.849 million USAR shares.
Central to the acquisition is the Pela Ema mine, a unique deposit known for producing all four magnetic rare earth elements (neodymium, praseodymium, terbium, and dysprosium).
The acquisition also secures a 15-year, 100% offtake agreement with a Special Purpose Vehicle (SPV) that includes protective price floors, ensuring revenue stability regardless of commodity price volatility.
The financial implications of the merger are substantial.
Serra Verde is projected to achieve an annualized run-rate EBITDA of $550 million to $650 million by the end of 2027.
Looking further ahead, the combined company has set an ambitious target of approximately $1.8 billion in EBITDA by 2030.
The pro-forma entity is expected to hold a liquidity cushion of approximately $3.2 billion, providing the capital necessary to accelerate the development of processing facilities and magnet manufacturing plants in the United States.
This liquidity is seen as vital for navigating the capital-intensive nature of the mining and refining industries.