Critical Metals sets European Lithium takeover exchange ratio at 0.045 shares

Key Facts

Critical Metals announced that the exchange ratio for its proposed takeover of European Lithium had been set at 0.045 new shares for each share, ahead of voting meetings scheduled for October. According to the company's statement, shareholders will be entitled to consideration for shares held on the record date, subject to rounding, if the share scheme is implemented. The ratio was calculated using the average of the daily volume-weighted average prices of Critical Metals shares over 20 consecutive trading sessions, from 23 September to 20 October 2026. The exchange ratio reached the maximum permitted because the reference pricing average was at or below the specified floor. The deal terms, set out in the company's annual filing with the U.S. Securities and Exchange Commission, establish a reference price floor of US$8.00 and a ceiling of US$16.00. With the number of shares payable fixed, the company said "the value of the consideration will vary with the Critical Metals share price and the Australian dollar-U.S. dollar exchange rate".

The final ratio follows an amendment to the takeover terms in August 2026 that replaced the previous fixed exchange ratio of 0.035 Critical Metals shares for each European Lithium share. The amendment introduced a variable ratio within agreed limits, according to the company's statement updating the agreement. Critical Metals said the variable mechanism was intended to distribute the impact of changes in its share price fairly between the two companies' securityholders. Reuters had valued the deal at about US$835 million when the letter of intent was announced in April, before the exchange terms were amended. In the market reaction to that initial announcement, the agency reported that Critical Metals shares rose more than 6%.

The consideration arrangements include a sale facility allowing eligible holders to receive the net proceeds from the sale of their consideration shares through an agent, according to the Critical Metals update. Holders of 50,000 shares or listed options or fewer on the relevant record date are eligible for the facility. Under this mechanism, the agent sells the consideration shares, and participating securityholders receive the net proceeds. On the share issuance arrangements, the company said Critical Metals shares would be issued directly to eligible holders, replacing the previously proposed depositary interest structure through the Australian settlement system. The formula for consideration payable for listed options uses an exercise price of A$0.10. The option consideration is calculated under a cashless exercise mechanism, according to the company's exchange ratio statement.

The strategic rationale for the takeover includes consolidating ownership of the Tanbreez rare earths project in Greenland, according to the binding agreement statement. Critical Metals aims to increase its ownership of the project to 100% by acquiring European Lithium's 7.5% stake. The company had announced in an earlier filing that the transfer of an additional stake in the project had closed, increasing its ownership to 92.5%. It said the additional liquidity from European Lithium would support the development of Tanbreez and other projects. On mine development, it said the start of construction depended on the granting of the remaining operating permits and provision of the required financial security. At the group level, completion of the takeover would make European Lithium a wholly owned subsidiary of Critical Metals and result in its delisting from the Australian Securities Exchange.

Voting meetings for shareholders and optionholders were scheduled for 22 October 2026 in West Leederville, Western Australia, according to a company statement filed with the U.S. Securities and Exchange Commission. A general meeting of shareholders to consider resolutions tied to the deal's implementation will immediately precede the meetings to vote on the two schemes. The company stressed that implementation of each scheme was also conditional on those resolutions being passed. Implementation requires court approval, along with satisfaction or waiver of the remaining conditions. European Lithium expects to announce the final consideration for the option scheme on or around 28 October 2026. The September update had set November 2026 as the expected implementation date for the two schemes, subject to approvals and satisfaction of conditions.