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June 23 (Reuters) - Energy Fuels UUUU.A said on Tuesday it would acquire German magnet manufacturer Vacuumschmelze GmbH for about $1.9 billion in cash and stock, creating a rare earths-to-magnets business to serve defense, automotive and technology customers.

Under the agreement, Energy Fuels will acquire 100% of Vacuumschmelze GmbH, known as VAC, from U.S.-based private equity firm Ara Partners for $718 million in cash and 65.853 million newly issued Energy Fuels common shares.

Shares of Energy Fuels fell 7.2% in premarket trading.

The transaction is expected to close in early 2027.

The U.S. and Europe are working to secure supplies of critical minerals and reduce dependence on China, which dominates global rare earth mining, processing and magnet manufacturing.

Rare earth magnets are used in electric vehicles, defense systems, robotics, semiconductors and data centers.