When Critical Metals Corp agreed in May to acquire Australian lithium developer European Lithium, it offered a fixed price: 0.035 of a CRML share for every European Lithium share held. Three months and two amendments later, that number moves.
The company said in an August 19 announcement that the exchange ratio will now float within a band. If CRML's 20-day average price before the shareholder vote falls at or below $8.00, European Lithium shareholders receive the maximum of 0.045 CRML shares. If CRML trades at or above $16.00, they receive the minimum of 0.025. Between those two prices, the ratio adjusts on a straight-line basis. With CRML's 20-day average below $8.00 at the time of the announcement, the ratio currently sits at its maximum.
The structure is designed to share price swings between both sets of shareholders rather than leaving one side fully exposed. If CRML's stock falls, European Lithium holders get more shares to compensate. If it rises, they get fewer, limiting the dilution for existing CRML holders. A fixed ratio of 0.035 left European Lithium shareholders bearing all the downside if CRML slid between signing and closing — which it did.
For current CRML shareholders, a ratio of 0.045 rather than 0.035 means more new shares issued in the transaction. Every new share makes the existing ones a smaller slice of the combined company. The revised ratio also flows through to European Lithium's listed options and performance rights, which are priced by reference to the same exchange ratio.
Shares closed 22.59% higher at $7.1100 on August 23, on dollar volume of about $111 million. The stock remained below the $8.00 floor.
Mike Hanson, the Critical Metals board director leading the special committee overseeing the deal, said in the announcement that "the strategic rationale for bringing European Lithium and its assets fully into the CRML group is unchanged."
European Lithium expects to send shareholders the formal deal document — which will include an independent expert's assessment of whether the terms are fair — in early September. Subject to shareholder and court approval, the deal is expected to close in October 2026.