The Lynas Rare Earths Ltd (ASX: LYC) share price is down 6% after announcing the acquisition of Meteoric Resources Ltd (ASX: MEI).
Lynas is a major non-Chinese rare earth miner. It’s the world’s only commercial producer of separated light and heavy rare earth oxides outside of China. It has rare earth production facilities in Western Australia, as well as operations in Malaysia.
Takeover agreed
The Meteoric Resources share price has jumped 50% after it was announced the two ASX mining shares have entered into a binding takeover agreement where Lynas will be 100% of the business.
Lynas said the transaction brings Meteoric’s flagship Caldeira rare earth project and Brazilian expertise together with Lynas’ existing industry leading operations.
The ASX rare earth mining share also said that it diversifies and adds resource for Lynas. Caldeira is reportedly the largest known ionic clay JORC rare earth oxide (REO) mineral resource outside of China, containing both light and heavy rare earth elements.
This project has completed a definitive feasibility study (DFS) and is located in the “world-class” mining jurisdiction of Minas Gerais.
Lynas said its ownership also brings opportunities to develop downstream processing in Brazil.
This will reportedly contribute an estimated 802kt of NdPr oxides and 41kt of DyTb oxides within Meteoric’s reported mineral resource.
It will also reportedly increase Lynas’ reported measured and indicated TREO mineral resources by approximately 79% and reported ore reserve by approximately 26% on a pro forma arithmetic basis.
Lynas said it adds the potential for an average annual production of approximately 3,862 tonnes of NdPr and 127 tonnes of DyTb over Caldeira’s mine life, based on the DFS production target, at a competitive cost base.
What will this cost?
Lynas said the exchange ratio is 0.0207 Lynas shares per Meteoric share, which implies an equity deal value of A$968 million on the average Lynas share price over the last 60 days.
At the time of the announcement, it represented A$0.286 per Meteoric Resources share, which was a 68.4% premium to the last closing price.
The Meteoric Resources board have unanimously recommended the offer in absence of a superior offer and will vote in favour. The largest shareholder – Tolga Kumova – also intends to vote in favour of the deal.
Final thoughts on the Lynas share price
Clearly, with the Lynas share price down 6%, investors aren’t a huge fan of the takeover and the offer isn’t quite as attractive as it was before today’s trading.
With the Lynas share price down more than 40% since the 2026 high, this could be an opportunistic time to invest as the company secures a greater share of the future global supply of rare earths.
But, it’s not one of the stocks I’m looking to buy for my own portfolio, so I’d focus on other ASX growth shares.
