TLDR
- USA Rare Earth (USAR) agreed to acquire Serra Verde Group in a $2.8 billion cash-and-stock deal
- The deal includes $300 million in cash and 126.8 million newly issued USAR shares
- Serra Verde’s Pela Ema mine in Brazil is projected to supply 50%+ of non-China heavy rare earths by 2027
- The combined company targets around $1.8 billion in EBITDA by 2030
- USAR stock rose 8.25% following the announcement
USA Rare Earth signed a definitive agreement on April 19 to acquire 100% of SVRE Holdings Ltd., the parent company of Brazil’s Serra Verde Group, in a deal valued at approximately $2.8 billion.
$USAR to acquire Serra Verde Group in a $2.8B deal, made up of $300M in cash and 126.849M new shares. The deal gives USA Rare Earth access to Brazil’s Serra Verde operation, which the company says is the only large-scale producer outside Asia of all four magnetic rare earths. pic.twitter.com/oX3o64c5Sh
— Wall St Engine (@wallstengine) April 20, 2026
The transaction is structured as $300 million in cash plus roughly 126.8 million newly issued USAR shares. The deal is expected to close in the third quarter of 2026, pending shareholder approval and regulatory clearance.
Serra Verde owns the Pela Ema mine in Goiás, Brazil. It is the first operating ionic clay rare earth deposit in the Western world, and the only producer outside Asia capable of supplying all four key magnetic rare earths at scale.
Those include high-value heavy rare earths such as dysprosium, terbium, and yttrium — materials critical to defense and advanced industrial applications.
The Pela Ema mine began production in 2024. By 2027, it is expected to supply more than 50% of non-China heavy rare earths, a figure that underlines the strategic weight of the deal given ongoing U.S.-China tensions over critical mineral supply chains.
The acquisition is backed by a $565 million financing package from the U.S. International Development Finance Corporation (DFC), along with a 15-year, 100% offtake agreement with a U.S.-capitalized special purpose vehicle. Price floors are included for key magnetic elements.
Financials and Projections
USA Rare Earth projects Serra Verde will deliver between $550 million and $650 million in annualized run-rate EBITDA by the end of 2027.
The combined company is targeting approximately $1.8 billion in EBITDA by 2030. That’s an ambitious number for a company whose 2025 revenues collapsed and which continues to generate negative free cash flow.
Analysts currently rate USAR a Buy with a $25.00 price target. The stock trades with a market cap of around $4 billion.
Under the merger terms, all SVRE shares and certain warrants will convert into cash and USAR stock. Performance-based options will be substituted with restricted stock units subject to continued service.
Existing voting agreements secure support from USAR shareholders representing around 9% of outstanding stock.
Leadership Changes
Serra Verde chairman Sir Mick Davis and CEO Thras Moraitis are both set to join the USAR board following the close of the deal.
Moraitis will also take on the role of President of USA Rare Earth upon closing — a notable leadership addition given his operational experience running Serra Verde from startup to production.
If stockholder approval is not obtained under certain circumstances, USAR is required to pay Serra Verde up to $75 million as a termination fee.
USA Rare Earth describes itself as a vertically integrated rare earths company, with operations including the Stillwater magnet facility in Oklahoma and the Round Top project in Texas.
This acquisition is the company’s second major deal in recent months, and would extend that vertical integration to include a producing mine in Brazil for the first time.
USAR stock was up 8.25% on the day of the announcement.
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