Critical Metals proposes $835M all-share deal for European Lithium to gain full control of Greenland’s Tanbreez rare earth deposit, sending shares soaring.<\/p>\n
A proposed all-share takeover worth roughly $835 million has sent European Lithium shares surging nearly 38 percent, as US-based Critical Metals moves to consolidate full ownership of one of the world\u2019s largest undeveloped heavy rare earth deposits outside China.<\/p>\n
The non-binding letter of intent, unveiled on April 27, 2026, centers entirely on the Tanbreez project in Greenland. Critical Metals already controls 92.5 percent of the asset after securing a majority stake in mid-April, with European Lithium holding the remaining 7.5 percent. A successful acquisition would give Critical Metals sole ownership of a deposit that a preliminary economic assessment values at $3 billion, supported by a resource base of 4.7 billion tonnes. Offtake agreements already cover 75 percent of planned production, and the US Export-Import Bank has committed $120 million in financing. First output is targeted for the fourth quarter of 2028 or the first quarter of 2029.<\/p>\n
Under the proposed structure, European Lithium shareholders would receive 0.035 Critical Metals shares for each share they hold \u2014 a pure equity swap with no cash component. Based on recent trading levels, that exchange prices European Lithium at around $835 million.<\/p>\n
The deal also unravels a complex cross-shareholding. European Lithium currently owns approximately 34 percent of Critical Metals\u2019 outstanding shares, representing roughly 45.5 million shares with a market value of about $540 million. Critical Metals plans to cancel those shares upon completion, reducing dilution for existing holders and boosting the combined entity\u2019s free float.<\/p>\n
Should investors sell immediately? Or is it worth buying European Lithium?<\/a><\/p>\n The merger would create a company with pro-forma cash reserves of roughly $343 million. European Lithium contributes the bulk of that \u2014 around $219 million as of late March 2026 \u2014 while Critical Metals adds its own cash holdings. Management intends to deploy that capital to accelerate development at Tanbreez.<\/p>\n Completion is subject to several conditions. Both parties must negotiate a definitive agreement, then secure approvals from shareholders, regulators and Australian courts. A key requirement: European Lithium must maintain net cash of at least A$330 million at closing. A shareholder vote is tentatively scheduled for the third quarter of 2026, with the transaction expected to close in the second half of the year.<\/p>\n The integration process may be smoothed by significant overlap in leadership. Tony Sage serves as both CEO of Critical Metals and executive chairman of European Lithium.<\/p>\n