European Lithium (ASX:EUR) has agreed to be acquired by Nasdaq-listed Critical Metals at an implied value of AU$0.58 per share, according to a Tuesday filing with the Australian bourse.
Under the binding deal, European Lithium shareholders will get 0.035 Critical Metals shares for every European Lithium share held, per the filing.
Once the transaction is completed, European Lithium's 7.5% interest in the Tanbreez rare earths project in Greenland will be consolidated within Critical Metals to make it the sole owner of Tanbreez.
European Lithium, which has a shareholding of about 31% shareholding in Critical Metals, said its shareholders will own about 41% of the combined Critical Metals group following the acquisition.
The deal "removes the look-through valuation discount associated with European Lithium's shareholding in Critical Metals" and "creates a simpler and more compelling investment proposition" for European Lithium shareholders, the company said.
Critical Metals is considering a secondary listing on the Australian stock exchange, and if it pursues the option, European Lithium shareholders will receive the consideration in ASX-listed CHESS depository interests.