Critical Metals plans to acquire European Lithium for US$835 million, strengthening Tanbreez ownership, liquidity, and financial position.
Critical Metals Corp., a prominent company in the critical minerals mining sector, has announced that it has signed a letter of intent to acquire all outstanding shares of European Lithium Ltd.. This proposed acquisition marks a significant strategic step for Critical Metals as it aims to strengthen its position in the global rare earth and lithium supply chain while improving its financial and operational flexibility.
Under the terms of the proposed transaction, shareholders of European Lithium would receive 0.035 shares of Critical Metals for every European Lithium share they currently own. Based on this agreed exchange ratio, along with Critical Metals’ unaffected closing share price and the prevailing U.S. dollar to Australian dollar exchange rate as of April 22, 2026, the total estimated consideration for European Lithium equity holders stands at approximately US$835 million.
The transaction remains subject to the execution of a definitive agreement and several regulatory, legal, and shareholder approvals before it can be finalized.
Critical Metals believes the proposed acquisition offers strong strategic and financial benefits. One of the key advantages is the cancellation of 45,536,338 shares of Critical Metals currently held by European Lithium, representing approximately 34% of Critical Metals’ outstanding shares. These shares, referred to as cross-holding shares, were valued at approximately US$540 million as of the measurement date. Once the transaction is completed, Critical Metals intends to cancel these shares, significantly reducing shareholder dilution while increasing the company’s public float. This move is expected to enhance market liquidity and improve investor confidence.
Another major benefit is the consolidation of ownership in the Tanbreez Rare Earth Project located in Greenland. European Lithium currently owns a 7.5% stake in Tanbreez. Following the acquisition, Critical Metals will be positioned to consolidate full ownership of the project, reaching 100% control. This will simplify ownership structure, streamline decision-making processes, and strengthen financing strategies as the project moves closer to development.
The acquisition also substantially strengthens Critical Metals’ financial position. European Lithium currently holds approximately AUD$306 million, equivalent to around US$219 million, in cash as of March 31, 2026. Combined with Critical Metals’ standalone cash balance of approximately US$124 million, the merged company would have a significantly stronger balance sheet to support project development. In addition, European Lithium holds around US$11 million in marketable securities, excluding the cross-holding shares.
This stronger financial foundation is particularly important for advancing the Tanbreez project, which is expected to play a major role in supplying heavy rare earth elements. As global demand for these materials continues to rise, especially from Western allied nations seeking secure and diversified supply chains, Critical Metals aims to position Tanbreez as a key strategic asset.
The transaction also removes the issue of frequent block sales of Critical Metals shares by European Lithium, which had often been sold at discounts to prevailing market prices. Eliminating this overhang is expected to improve market stability and make Critical Metals more attractive to strategic investors and potential future acquirers.
Additionally, the removal of European Lithium as a 34% shareholder will place greater ownership control into the broader market, potentially improving governance flexibility and shareholder diversity.
The proposed transaction will be carried out through two interdependent Schemes of Arrangement involving European Lithium’s ordinary shares and listed options. European Lithium shares will be exchanged based on the agreed exchange ratio, while listed options will be transferred to Critical Metals in return for newly issued Critical Metals shares based on a defined cashless exercise formula.
European Lithium’s zero-dollar exercise price unlisted options, known as ZEPOs, will also be addressed. Certain vested ZEPO tranches totaling 90 million will be cancelled in exchange for newly issued Critical Metals shares. The remaining 180 million ZEPOs, tied to higher share price performance targets, will be converted into economically equivalent securities issued by Critical Metals with the same vesting terms and expiry dates, adjusted according to the exchange ratio.
Completion of the transaction depends on multiple conditions, including shareholder approval from European Lithium, regulatory and court approvals, satisfactory due diligence by both companies, a minimum required cash and liquid asset balance for European Lithium, and no material adverse changes in either company’s operations or assets.
European Lithium has also agreed to an exclusivity period during which it cannot seek or negotiate alternative acquisition proposals. The transaction is expected to close in the second half of 2026, with a shareholder meeting likely to take place in the third quarter of 2026 for final approval.
