Critical Metals Sets European Lithium Acquisition Exchange Ratio at 0.045 Share

Key Facts

Critical Metals set the share exchange ratio for its proposed acquisition of European Lithium at 0.045 new share for each share in the target company, according to a company statement on the deal consideration. It said entitlement to this consideration remains conditional on implementation of the share scheme, subject to rounding when calculating shareholders' entitlements. The acquisition covers all issued shares and all listed options in European Lithium through a share scheme and an option scheme. Consideration under both schemes will be paid through the issuance of new ordinary shares in Critical Metals, according to its statement on progress with the merger process. The value of the acquisition consideration varies with Critical Metals' share price and the Australian dollar's exchange rate against the US dollar. The mechanism for determining the exchange ratio uses a reference price subject to a floor of US$8.00 and a cap of US$16.00.

The specified ratio follows an amendment to the exchange terms, which previously provided for fixed consideration of 0.035 new Critical Metals share for each European Lithium share. The company replaced that fixed ratio with a variable mechanism within specified limits, according to its statement updating the proposed acquisition terms. It said the amendment was intended to share the impact of movements in its share price between the two companies' securityholders. It said the mechanism aims to ensure those effects are "distributed fairly between the securityholders of both parties." Critical Metals signed a binding scheme implementation agreement to acquire European Lithium on 18 May 2026, according to a filing with the US Securities and Exchange Commission.

The deal builds on an existing ownership relationship between the two companies, as European Lithium held about 31% of Critical Metals' outstanding shares when the binding agreement was announced, according to the company's statement at the time. At the asset level, Critical Metals owns a 92.5% stake in Tanbreez, according to its annual report filed with the US Securities and Exchange Commission. European Lithium owns the remaining 7.5%, meaning the proposed acquisition would bring both stakes under group ownership if completed. As part of the proposal's financial background, Critical Metals said when announcing it that European Lithium's cash balance stood at about A$306 million on 31 March 2026. That balance dates from before the binding agreement was signed, forming part of the background to the liquidity boost expected from the acquisition.

On the procedural front, Mike Hanson, a Critical Metals board member and chairman of the deal's special committee, described the court orders and registration of the scheme booklet as "two important milestones that move the transaction into its final stages." Implementation remains subject to court approval and the satisfaction or waiver of remaining conditions, according to the timetable announced by the company. European Lithium expects to announce the final consideration for listed options on or around 28 October 2026, determining optionholders' entitlements alongside the specified share consideration. The announced timetable targets implementation of the share and option schemes in November 2026. The company had previously targeted completion in September 2026 before moving the target date to November. If the deal is completed, European Lithium will become a wholly owned subsidiary of Critical Metals. European Lithium will be delisted from the Australian Securities Exchange, according to Critical Metals' annual report on the consequences of completing the acquisition.