American Rare Earths has announced the signing of a definitive agreement to acquire Brazil's Serra Verde Group for approximately $2.8 billion. This strategic move is aimed at creating a global leader in the rare earths sector, with a fully integrated supply chain spanning from mining to magnet manufacturing.
Under the terms of the agreement, American Rare Earths will pay $300 million in cash and issue approximately 126.85 million new shares. Based on the closing share price of $19.95 on April 17, the equity value of Serra Verde is estimated at around $2.8 billion. The transaction is expected to be finalized in the third quarter of 2026, pending regulatory approvals and a shareholder vote.
Serra Verde owns the Pela Ema rare earths mine and processing plant located in the state of Goiás, Brazil. It is the only operation outside of Asia capable of producing all four magnetic rare earth elements—neodymium, praseodymium, dysprosium, and terbium—on a commercial scale. The mine commenced operations in 2024 and, upon reaching full capacity by the end of 2027, is projected to produce approximately 6,400 metric tons of rare earth oxides annually.
A central component of the deal is a 15-year offtake agreement. A special purpose vehicle, funded by both U.S. government agencies and private capital, will purchase 100% of Serra Verde's Phase 1 production of neodymium, praseodymium, dysprosium, and terbium. This agreement establishes minimum price guarantees for these four elements. The specific floor prices are set at $110 per kilogram for neodymium-praseodymium oxide, $575 per kilogram for dysprosium, and $2,050 per kilogram for terbium. When market prices exceed these minimums, Serra Verde will receive a 70% share of the additional revenue. The project has also secured $565 million in financing support from the U.S. International Development Finance Corporation.
Barbara Humpton, CEO of American Rare Earths, stated, "The acquisition of Serra Verde is a transformative step in building a global champion in the rare earths industry." The company anticipates that Serra Verde will generate annualized EBITDA between $550 million and $650 million by the end of 2027. The combined company is targeting an EBITDA of approximately $1.8 billion by 2030.
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