Critical Metals Makes A$1.3 Billion All-Share Play for European Lithium

Critical Metals Corp. plans to buy European Lithium for $835M in an all-share deal, merging rare earth and lithium assets in Greenland and Austria amid EU-US critical minerals cooperation.

A cross-border consolidation in the critical minerals space is taking shape, with Critical Metals Corp. unveiling plans to acquire Australian-listed European Lithium in a deal valued at approximately US$835 million. The transaction, structured as an all-share exchange, would merge two companies with overlapping interests in Greenland’s rare earth riches and Europe’s lithium ambitions.

The offer, signed as a memorandum of understanding on April 27, 2026, gives European Lithium shareholders 0.035 Critical Metals shares for each of their own. The implied valuation draws on closing prices from April 22. But the deal’s structure carries an unusual twist: European Lithium already owns roughly 34% of Critical Metals’ outstanding stock — some 45.5 million shares worth around US$540 million. That cross-holding will be cancelled upon completion, reducing dilution for existing Critical Metals investors and boosting the group’s free float.

Greenland’s Tanbreez Project Sits at the Core

The strategic logic behind the tie-up centres on Greenland. Critical Metals already holds 92.5% of the Tanbreez project, described as one of the world’s largest undeveloped heavy rare earth deposits. European Lithium owns the remaining 7.5%. Full control would streamline financing decisions and development timelines for an asset that has attracted attention from policymakers on both sides of the Atlantic.

The timing of the announcement was no coincidence. On the same day, the European Union and the United States signed a memorandum of understanding in Washington to cooperate on critical minerals supply chains. Both sides are seeking to reduce dependence on single-source suppliers — China currently provides the EU with all of its heavy rare earth imports. Possible trade measures under discussion include adjusted minimum price thresholds at borders.

European Lithium’s broader portfolio extends beyond Greenland. Its flagship Wolfsberg project in Austria is designed to supply battery-grade lithium to Europe’s electric vehicle industry. The mining licence there has been extended until early 2028, but local opposition and outstanding environmental permits have pushed the final investment decision back to late 2026. A pilot processing plant at Tanbreez is expected to begin operations in May.

Conditions, Cash and a Clean-Up

The transaction comes with strings attached. European Lithium must hold at least A$330 million in cash at closing. As of end-March 2026, it reported roughly A$306 million — still below the threshold. Critical Metals itself had around US$124 million in liquidity.

A final binding agreement has yet to be signed. European Lithium shareholders are expected to vote on the plan in the third quarter of 2026, with completion targeted for the second half of the year. Markets reacted swiftly: Critical Metals shares rose around 7% to US$12.32 following the announcement.

The takeover bid follows a period of intense corporate activity at European Lithium. The company recently cancelled 30 million performance rights, removing a future dilution overhang. It also launched a share buyback programme in mid-April, targeting up to 10% of its own capital at an estimated cost of A$12.6 million.

Trading Halt and Auditor Warnings

The Australian Securities Exchange suspended trading in European Lithium shares on Tuesday, granting management time to respond to media reports about a potential change of control. The stock had surged roughly 30% in the seven sessions before the halt. Trading is expected to resume on April 28, with an official statement now on the table.

Despite the flurry of positive corporate actions, the company’s financial position remains under scrutiny. Auditors have attached going-concern warnings to European Lithium’s 2024 and 2025 accounts, citing ongoing operating losses and negative net working capital. The cash buffer required by the Critical Metals deal would go some way to addressing those concerns — provided the conditions are met.