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Acquisition · Critical Minerals · Magnets · Rare Earths
Rare earths producer Energy Fuels acquired Germany's Vacuumschmelze (VAC) for $1.9 billion in a cash-and-stock deal, positioning itself as a leading non-Chinese producer of critical magnets for aerospace, defense, and renewable energy sectors.
Energy Fuels, a U.S.-based uranium producer, paid private equity firm Ara Partners $718 million in cash and issued 65.853 million new common shares for VAC. This strategic move aligns with Washington and allied efforts, including G7 leaders' stated goal to reduce dependence on any single supplier for rare earths and permanent magnets to less than 60% by 2030, ultimately targeting 50%.
VAC, a century-old magnet producer, serves over 1,000 customers, including General Motors, from facilities globally. Energy Fuels CEO Ross Bhappu emphasized the acquisition of an established producer with customer acceptance, rather than building a new magnet business.
Ara Partners will become a significant Energy Fuels shareholder with approximately a 20% stake and a board seat upon the deal's closure early next year. Energy Fuels plans to integrate VAC's 3,600 workers and CEO Erik Eschen, maintaining the Vacuumschmelze brand and expanding its South Carolina facility while keeping existing plants, including one in China, operational.
Energy Fuels shares initially fell 6.2% in premarket trading, settling down 2.3% following the announcement, as reported by Reuters.