USA Rare Earth to Acquire Serra Verde: Transformational Deal Creates Global Rare Earth Leader
USA Rare Earth Announces \$2.8 Billion Acquisition of Serra Verde Group: Transformational Step to Global Rare Earth Leadership
Date: April 20, 2026
Ticker: USAR (Nasdaq)
Key Highlights of the Transaction
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Definitive agreement signed for USA Rare Earth (USAR) to acquire 100% of Serra Verde Group for approximately \$2.8 billion.
The consideration comprises \$300 million in cash and 126.849 million newly issued USAR shares, based on a closing price of \$19.95 per share.
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Combined entity will be the only scaled producer outside Asia of all four magnetic rare earth elements (Nd, Pr, Dy, Tb)—vital for permanent magnets used in EVs, wind turbines, robotics, and defense.
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15-year, 100% offtake agreement secured for all four magnetic rare earths with a special purpose vehicle (SPV) capitalized by U.S. government agencies and private sources. This agreement includes minimum price floors, providing significant cash flow certainty and upside sharing.
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Major U.S. government financing and support: \$565 million in fully committed DFC funding for Serra Verde’s expansion and \$1.6 billion in equity and debt commitments from the Department of Commerce for the combined group, further enhancing liquidity and growth prospects.
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Serra Verde is expected to deliver \$550–\$650 million in annualized run-rate EBITDA by end of 2027, with the combined company targeting approximately \$1.8 billion of EBITDA by 2030 and 80% cash flow conversion.
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Phase 1 production at Serra Verde to reach ~6,400 metric tons of TREO per year by 2027, with potential to double through a Phase 2 expansion before 2030.
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Robust pro-forma liquidity of approximately \$3.2 billion, including \$1.2 billion in cash and \$1.8 billion in milestone-based liquidity from DFC and Commerce loan facilities.
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Leadership and expertise strengthened: Sir Mick Davis (Chairman, Serra Verde) and Thras Moraitis (CEO, Serra Verde) will join USAR’s Board; Moraitis will also become President of USA Rare Earth.
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USAR to host a conference call at 8:30am ET, April 20, 2026, to discuss the transaction.
Strategic and Financial Rationale
The acquisition positions USA Rare Earth as the undisputed leader in the non-Asian rare earth supply chain, with full vertical integration from mining to magnet production across the US, Brazil, UK, and France. The Pela Ema mine, operated by Serra Verde, is the only non-Asian project with commercial production of all four magnetic rare earths, including the highly valuable heavy rare earths Dysprosium (Dy), Terbium (Tb), and Yttrium (Y).
The combined company will provide a secure, diversified supply of critical minerals, a key concern for governments and strategic industries seeking independence from Chinese supply chains. The 15-year offtake agreement with the SPV—backed by U.S. government agencies—includes price floors for Nd, Pr, Dy, and Tb, significantly de-risking cash flows and enhancing revenue certainty.
Serra Verde brings a world-class team, fully permitted and operational assets, and a proven track record. The Pela Ema operation came online in 2024 after more than \$1.1 billion invested in development. The company is also recognized for its responsible, low-impact operations (no wet tailings, renewable energy use, and leading safety record).
The combined group’s projected financial profile is compelling: EBITDA is expected to reach \$550–\$650 million by end of 2027 (Serra Verde standalone) and c.\$1.8 billion at the group level by 2030. Pro-forma liquidity of \$3.2 billion ensures ample flexibility for expansion and operations, with expansion plans at Pela Ema that could double production before 2030.
The platform will also benefit from technical leadership (including a partnership with Carester for rare earth separation), expanded downstream manufacturing (via Less Common Metals facilities in France, the US, and beyond), and increased magnet-making capacity to address growing demand from Western industrial partners.
Important Shareholder Information and Price-Sensitive Factors
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This transaction is transformative for USA Rare Earth and Serra Verde shareholders: It creates a fully integrated, globally competitive rare earths platform with government-backed offtake and financing, likely to be highly attractive to strategic investors and customers.
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EBITDA growth and cash flow certainty—due to the price floors and offtake agreement—are likely to materially de-risk the group’s financial profile and may be viewed as highly positive by investors.
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Significant U.S. government backing (including DFC and Department of Commerce commitments) de-risks operational funding and signals strategic importance, which could attract further investor interest and potentially drive share price re-rating.
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Leadership changes and additions (Mick Davis and Thras Moraitis) bring world-class mining and operations experience, which should be seen as a major positive for governance and execution.
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Risk factors include successful completion (expected Q3 2026, subject to approvals), integration risks, commodity price volatility, execution of expansion plans, and macro/geopolitical uncertainties, all of which should remain on investor radar.
Conference Call Details
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Live call: April 20, 2026, 8:30 AM ET
U.S./Canada Toll-Free: +1 (833) 890-8030
International: +1 (412) 564-6268
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Replay available until May 20, 2026 (Access code: 4512864)
About USA Rare Earth
USA Rare Earth (USAR) is developing a fully integrated rare earth and permanent magnet supply chain, with assets in the U.S., UK, France, and Brazil. Its operations span mining, separation, metallization, alloy production, and magnet manufacturing, serving critical industries such as aerospace, defense, semiconductors, energy, and industrials.
About Serra Verde Group
Serra Verde operates the Pela Ema mine in Brazil, the only non-Asian operation producing all four magnetic REEs at scale, with strong ESG credentials, a skilled workforce, and institutional backing from Denham Capital, Vision Blue Resources, and The Energy & Minerals Group.
Investor Contacts
Disclaimer
This article contains forward-looking statements based on current expectations and projections about future events, which are subject to risks and uncertainties. Actual results may differ materially from those anticipated due to various factors including, but not limited to, market conditions, regulatory approvals, operational integration, financing, and global economic factors. Investors are advised to review the company’s filings with the SEC and consult their financial advisors before making investment decisions. The information provided herein does not constitute investment advice.
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