European Lithium (ASX:EUR) has replaced the fixed exchange ratio in its proposed merger with Critical Metals (NASDAQ:CRML) with a floating mechanism linked to the US-listed company’s share price.
The proposal would see Critical Metals acquire all issued European Lithium shares through a court-approved scheme.
Under the previous terms, European Lithium shareholders would have received 0.035 new Critical Metals shares for each share held.
The revised ratio will range from 0.025–0.045 Critical Metals shares, depending on the company’s average daily volume-weighted average price (VWAP) over a 20-day period before the scheme meeting.
A ratio of 0.045 will apply if the VWAP is US$8 ($11.30) or lower, while the minimum ratio of 0.025 will apply if it is US$16 or higher. Between those prices, the ratio will adjust on a linear basis.
European Lithium says the revised mechanism is intended to reduce the effect of Critical Metals’ share-price movements on the transaction before implementation.
Based on Critical Metals’ latest 20-day VWAP, which was below US$8, the maximum ratio of 0.045 would currently apply. This would give European Lithium shareholders approximately 28.6% more Critical Metals shares than under the previous fixed ratio.
However, the final ratio will not be determined until the VWAP measurement period concludes.
European Lithium says it expects to dispatch a scheme booklet, including an independent expert’s report, in early September. Implementation is targeted for October 2026, subject to shareholder, optionholder, and court approvals.
The amendments do not change the recommendation of European Lithium’s independent board committee.
Subject to confirmation of updated calculations, European Lithium shareholders are expected to own approximately 38% of the combined Critical Metals group after implementation.
Critical Metals’ principal assets include the Tanbreez Rare Earths Project in Greenland and the Wolfsberg Lithium Project in Austria.
European Lithium is an exploration and development company with lithium assets in Austria, Ukraine, and Ireland, mineral interests in Australia, and rare earth exposure in Greenland.
Write to France Pinzon at Mining.com.au
Images: European Lithium
