Carey Olsen advises on rare earth acquisition

In a significant move within the critical minerals sector, Carey Olsen has provided legal counsel to U.S. critical minerals company USA Rare Earth, Inc., which is listed on NASDAQ under the ticker symbol USAR. The firm has successfully advised Rare Earth on its acquisition of the Brazilian rare earth producer Serra Verde Group, a transaction valued at around US$2.8 billion. The acquisition was carried out through a statutory merger in the British Virgin Islands (BVI) last month, heralding the establishment of a fully integrated rare earth supply chain that spans across the U.S., the UK, and Brazil.

This strategic merger melds USA Rare Earth's capabilities in processing, metallisation, and magnet manufacturing with Serra Verde's mining operations, marking Serra Verde as the only scaled producer of all four magnetic rare earth elements outside Asia. Notably, when Rare Earth confirmed its agreement to acquire 100% of Serra Verde Group earlier this year, the details of the transaction included US$300 million in cash along with 126.849 million shares of newly issued common stock from USAR, affirming an equity value for Serra Verde approximating US$2.8 billion.

The legal guidance on this BVI statutory merger was led by Carey Olsen's London corporate team, which included partner Jasmine Amaria and associate Alex Newitt, alongside the onshore U.S. counsel, Latham & Watkins LLP. Jasmine Amaria remarked that "it was a pleasure to act as BVI legal counsel on this landmark transaction, which highlights the growing importance of diversified rare earth supply chains outside Asia." She further noted that "by bringing together complementary capabilities across the value chain, the combined business is well positioned to support the increasing demand for critical minerals." The successful closure of this acquisition underscores Carey Olsen's proficiency in navigating complex international mergers and acquisitions.

Furthermore, this isn't the first time Carey Olsen has partnered with USA Rare Earth. The firm’s corporate team in the Cayman Islands previously provided counsel for Rare Earth’s US$870 million business combination with Inflection Point Acquisition Corp. II, a Cayman Islands special purpose acquisition company, showcasing its extensive expertise in sophisticated international transactions within the rapidly evolving sector of critical minerals.