Mentioned:
USA Rare Earth is making a multi billion dollar bet on a rare earth company in Brazil. But, why?
What’s happening:
- USA Rare Earth (NASDAQ: USAR) has entered into an agreement to acquire Serra Verde Group for approximately $2.8B USD in a cash and stock deal
By the numbers:
- USA Rare Earth will pay approximately $300M USD in cash and issue roughly 126M common shares to acquire Serra Verde Group
Why it matters:
- Serra Verde Group owns the Pela Ema rare earth project and processing plant located in Brazil and is currently producing both light and heavy rare earth elements including neodymium, praseodymium, dysprosium and terbium
Going deeper:
- Serra Verde Group has previously raised more than $1B USD in growth capital to bring their Pela Ema rare earth project into full scale production
- Serra Verde Group has also publicly stated they have $565M funding commitment from the United States International Development Finance Corporation to refinance existing debt and expand the production capacity at Pela Ema
The intrigue:
- USA Rare Earth previously made major waves on Wall Street when they landed up to $1.6B USD in potential funding from the United States government in exchange for common shares and warrants in USA Rare Earth
