Critical Metals Corp. (NASDAQ:CRML) saw its shares rise 7.5% following the announcement that it has signed a letter of intent to buy all outstanding ordinary shares of European Lithium Ltd. (ASX:EUR) in a stock-based transaction.
Under the terms put forward, each European Lithium share would be exchanged for 0.035 shares of Critical Metals. Using Critical Metals’ closing share price on April 22, 2026, the exchange ratio produces an aggregate consideration of about $835 million payable to European Lithium equity holders.
The companies said the transaction remains subject to a definitive agreement and a number of closing conditions, with completion targeted for the second half of 2026.
European Lithium currently holds a significant equity position in Critical Metals, owning 45,536,338 shares of Critical Metals, equal to roughly 34% of Critical Metals’ issued stock as of April 22, 2026. Those cross-holding shares had a market value of $540 million at the referenced date. Critical Metals has indicated its intention to cancel those cross-holding shares if the acquisition proceeds, a step the company said would reduce shareholder dilution and increase its public float.
One strategic outcome of the proposed transaction is that Critical Metals would consolidate full ownership of the Tanbreez Rare Earth Project in Greenland. European Lithium presently holds a 7.5% interest in the Tanbreez project.
On the balance-sheet front, European Lithium reported a cash balance of approximately AUD$306 million, equivalent to about $219 million, as of March 31, 2026. Critical Metals’ standalone cash on hand is approximately $124 million. European Lithium additionally holds marketable securities with a market value near $11 million, a figure that excludes the cross-holding shares in Critical Metals.
The mechanics of the proposed takeover would be carried out via two interdependent Schemes of Arrangement that cover European Lithium’s shares and its listed options. Completion is conditional on several matters, including approval by European Lithium shareholders, obtaining necessary regulatory clearances, and European Lithium maintaining a net cash and liquid assets position of no less than AUD$330 million.
For the transaction, Critical Metals has appointed Cantor Fitzgerald & Co. to serve as its financial advisor. European Lithium has engaged Poynton Stavrianou as its financial adviser.
Summary of the proposal
- Offer structure: 0.035 Critical Metals shares per European Lithium share.
- Indicative value: Approximately $835 million based on Critical Metals’ April 22, 2026 close.
- Timing: Expected to close in the second half of 2026, subject to definitive agreement and conditions.
Key financial positions noted
- European Lithium cash: ~AUD$306 million (~$219 million) as of March 31, 2026.
- Critical Metals cash: ~ $124 million standalone.
- European Lithium marketable securities: ~ $11 million, excluding cross-holding shares.