USA Rare Earth (NASDAQ:USAR) shares jumped about 10% after the company announced a definitive agreement to acquire Brazilian rare earth producer Serra Verde Group in a transaction valued at approximately $2.8 billion.
Under the agreement, USA Rare Earth will pay $300 million in cash and issue 126.849 million newly issued shares to acquire 100% of Serra Verde. The deal values Serra Verde based on a share price of $19.95 as of April 17.
Serra Verde owns and operates the Pela Ema rare earth mine and processing facility in Goiás, Brazil, which began production in 2024. The company is currently positioned as the only large-scale producer outside Asia capable of supplying all four magnetic rare earth elements used in permanent magnets at scale, according to USA Rare Earth.
It added that the acquisition would create a vertically integrated rare earth platform spanning mining, processing, separation, metallization and magnet manufacturing.
The company also highlighted plans to expand production capacity at Serra Verde’s Brazilian operations and develop its Round Top project in the United States.
The combined entity is expected to have pro forma liquidity of about $3.2 billion, including cash holdings and access to additional government-linked financing facilities.
“The acquisition of Serra Verde represents a transformational step in delivering on our ambition to build a global champion and the partner of choice in rare earth elements, oxides, metals and magnets,” USA Rare Earth CEO Barbara Humpton said in a statement.
“By combining Serra Verde’s 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.”
Following the transaction, Serra Verde chairman Sir Mick Davis and CEO Thras Moraitis are set to join the USA Rare Earth board, with Moraitis also becoming president of the company.
The transaction is expected to close in the third quarter of 2026.