USA Rare Earth Inc. (USAR) on Monday said it has agreed to acquire Serra Verde Group, owner of the Pela Ema rare earth mine and processing plant in Brazil, in a deal valued at about $2.8 billion.
The consideration includes $300 million in cash and about 126.8 million newly issued USAR shares.
The transaction is expected to close in the third quarter of 2026.
Serra Verde's operation, which began production in 2024, produces key magnetic rare earth elements including dysprosium, terbium and yttrium. The company has secured a $565 million financing package from the U.S. International Development Finance Corporation to fund expansion through to positive cash flow, along with a 15-year offtake agreement covering 100% of its output with price floors.
At full Phase 1 capacity, expected by the end of 2027, Serra Verde is projected to produce about 6,400 metric tons of total rare earth oxides annually and generate EBITDA of $550 million to $650 million by the end of 2027.
USA Rare Earth said the acquisition will create a leading global rare earth platform with capabilities across the full value chain, from mining to magnet production, while significantly expanding non-China supply of critical heavy rare earths.
As part of the transaction, Mick Davis, chairman of Serra Verde and former CEO of Xstrata, is set to join the board, while Serra Verde CEO Thras Moraitis is expected to join as president and a board director. Current leadership, including chairman Michael Blitzer, CEO Barbara Humpton and CFO Rob Steele, will remain in their roles.
"By combining Serra Verdes world-class operations and team with our processing, separation, metallization and magnet-making capabilities, we are advancing our goal of creating a fully integrated platform that will serve as a cornerstone of global rare earth supply security for decades to come," said Barbara Humpton, Chief Executive Officer of USA Rare Earth.
USA Rare Earth stock is down more than 4% in pre-market trading after closing at $19.95 on Friday.
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