USA Rare Earth Announces Closing of Merger for $300M Cash + 126.8M Shares

What Happened
USA Rare Earth, Inc. (USAR) announced the closing of its merger with Serra Verde Rare Earths Ltd. (SVRE), effective when the Articles of Merger were registered in the British Virgin Islands on September 3, 2026. The aggregate merger consideration was $300,000,000 in cash plus 126,849,307 shares of USAR common stock issued to SVRE shareholders and certain other counterparties. USAR issued the shares relying on private placement exemptions (Section 4(a)(2) and Regulation S); the shares are not registered for resale pending a registration statement.

In connection with the closing, USAR assumed SVRE’s financing arrangements with the U.S. International Development Finance Corporation (DFC). Merger Sub assumed the Finance Agreement (initial loan up to $465M and an incremental loan up to $100M; aggregate facility up to $565M). The Incremental Loan had been funded prior to closing; DFC’s warrants were converted per the Merger Agreement and certain amounts were deemed repaid and discharged upon payment of the applicable merger consideration. USAR and certain former SVRE parties also entered into a Registration Rights Agreement, and USAR agreed to file a registration statement (Form S-3 or S-1) promptly after closing to register resale of the issued shares.

Key Details

• Closing date / Effective Time: September 3, 2026 (Articles of Merger registered in BVI).
• Merger consideration: $300,000,000 cash + 126,849,307 USAR common shares issued.
• DFC financing: USAR (via Merger Sub) assumed a Finance Agreement with up to $565M facility (Initial Loan up to $465M; Incremental Loan up to $100M). Initial Loan interest = Term SOFR (floor 0.00%) + 4.0%; term up to 15 years, repayable in up to 49 quarterly sculpted installments.
• Governance and controls: Thrasyvoulos Moraitis and Sir Michael Lawrence Davis were appointed to USAR’s board at closing; Vision Blue (VB (Rare Earths) Limited) has the right to designate one director while holding ≥5% (subject to Nominating Committee approval).
• Transfer and resale controls: Recipients of USAR shares entered into lock-up agreements (1/3 locked 90 days, 1/3 locked 180 days, 1/3 unrestricted); USAR agreed to file a registration statement (S-3 or S-1) on the first business day after the Transactions.

Why It Matters
This is a transformational acquisition for USAR: it adds SVRE’s assets and operations and brings a large cash payout and a substantial issuance of USAR stock to pay sellers and stakeholders. Investors should note the material increase in secured indebtedness (the DFC facility now sits with Merger Sub/USAR group) and the dilution from issuing 126.8 million new shares. The Registration Rights Agreement means those shares will be registered for resale on a timetable USAR has committed to, but lock-ups will limit immediate supply into the market for some holders. Board additions and Vision Blue’s appointment right change USAR’s governance mix following the transaction.