Weil, Sidley, Simpson Advise in $1.5B Rare Earth Production Deal

Weil Gotshal & Manges is advising a company backed by Fortress Investment Group on a $1.5 billion-plus deal aimed at creating a large-scale U.S. rare earth producer and processor, the firm said.

Fortress Value Acquisition Corp, a special purpose acquisition company, is merging with Secure Natural Resources LLC, which owns certain mining rights at California-based Mountain Pass Rare Earth Mining and Processing facility. The companies are also combining with MP Materials, the owner and operator of Mountain Pass, North America’s only rare earth mining and processing site.

China today produces 80% of the world’s rare earths, which are materials used in electric cars, smart phones, wind turbines, defense systems and other strategic technologies. Mountain Pass produces approximately 15% of global rare earth materials, but it has to send them to China for processing.

The deal is part of an effort to open a processing center in the U.S.

Sidley Austin said it is advising MP Materials and Simpson Thacher & Bartlett said it is advising Secure Natural Resources on the stock-for-stock transaction, which values the combined company at about $1.5 billion and is expected to close in 2020’s fourth quarter.