USA Rare Earth Acquires Serra Verde for $2.8 Billion

USA Rare Earth (Nasdaq: USAR) announced on April 20, 2026, that it signed a definitive agreement to acquire Brazil’s Serra Verde, securing a scaled non-Asia rare-earth producer and a 15-year offtake backed by U.S. government and private capital.

Deal Terms and Leadership Changes

The acquisition involves $300 million in cash plus 126.849 million newly issued USA Rare Earth common shares for 100% ownership of Serra Verde Group. The transaction is expected to close in the third quarter of 2026, subject to customary closing conditions and regulatory approvals.

Sir Mick Davis, Serra Verde’s chairman, and Thras Moraitis, its CEO, will join USA Rare Earth’s board, with Moraitis becoming president of the combined company. These leadership additions integrate Serra Verde’s senior management into USA Rare Earth’s executive team as the companies prepare for operational integration.

The acquisition’s valuation is based on USA Rare Earth’s April 17 closing share price of $19.95, implying an equity value of about $2.8 billion. One report cited a higher total consideration near $3.1 billion, reflecting different market calculations tied to the stock price.

Supply Offtake, Financing, and Outlook

Serra Verde owns the Pela Ema rare-earth mine and processing plant in Goiás, Brazil. It is the only scaled producer outside Asia of the four magnetic rare earths: neodymium, praseodymium, dysprosium, and terbium. This asset base supports the strategic goal of securing magnet-metal feedstock beyond Asian sources.

The company has a 15-year offtake agreement covering 100% of Phase 1 production with a special purpose vehicle capitalized by U.S. government entities and private investors. The contract includes price floors for the four elements, linking early production to long-term demand with price protections.

Serra Verde secured $565 million in financing from the U.S. International Development Finance Corp. to support expansion toward cash-flow positivity. Management expects the operation to supply more than half of non-China heavy rare-earth element output by 2027. Together, the financing and offtake create a policy-backed commercial path for ramping separated-oxide production.

Management projects Serra Verde will reach an annualized EBITDA run rate of $550 million to $650 million by the end of 2027 based on 100% separated-oxide sales. The combined company targets roughly $1.8 billion in annualized EBITDA by the end of 2030, with about 80% cash-flow conversion. These targets underpin USA Rare Earth’s case for scale and near-term cash generation from the acquired assets.

The deal integrates Serra Verde into USA Rare Earth’s mine-to-magnets supply chain, which includes Less Common Metals, a magnet plant in Stillwater, Oklahoma, and the Round Top deposit in Texas. By linking extraction and separation with alloying and magnet production, the transaction strengthens a rare-earth supply chain outside Asia that USA Rare Earth aims to scale commercially.

Supported by long-term offtake and U.S. policy financing, the acquisition positions USA Rare Earth as a key supplier in efforts to expand Western sources of critical magnet metals and to consolidate extraction through magnet manufacture under one corporate umbrella.