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LyondellBasell (LYB) to Acquire APK AG Recycling Technology

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LyondellBasell Industries N.V. (LYB - Free Report) announced that it has signed an agreement to purchase full ownership of APK AG in Merseburg, Germany. The acquisition enables LYB to grow and update its Circular and Low Carbon Solutions business, owing to its technology.

The transaction's closing is subject to customary closing conditions. LYB expects APK's solvent-based recycling technology to complement its existing mechanical and sophisticated recycling technologies. As a result, it has already invested in the company and worked collaboratively to bring the technology to scale. By acquiring APK, LYB protects the company's future after it entered into insolvency at the end of May 2024.

APK's solvent-based recycling technology is a significant addition to LyondellBasell's current and future mechanical and advanced recycling activities. This is a key step toward LYB's aim of producing and marketing at least 2 million metric tons of recycled and renewable-based polymers annually by 2030.

The recycling technology is an innovative solvent-based method for low-density polyethylene (LDPE). LYB intends to boost the recycling of hard-to-recycle flexible plastic waste products, which account for the vast bulk of mixed plastic waste generated by the consumer sector. The process separates the various polymers of difficult-to-recycle, flexible plastic waste materials, producing recycled materials with a high degree of purity suitable for new flexible packaging, including personal care items. The materials will be sold under the LYB Circulen portfolio.

Shares of LyondellBasell have lost 0.9% over the past year compared with a 6.1% decline of its industry.

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For the third quarter, LyondellBasell anticipates margins to gain from the lower costs of natural gas and natural gas liquids used in its North American and Middle Eastern production against higher oil-based expenses in most other locations. With the ongoing summer driving season, oxyfuel margins are projected to stay higher than historical levels because of high octane premiums. 

LYB intends to operate its assets in line with market demand in the third quarter, with average operating rates of 85% for North American olefins and polyolefins (O&P) assets, 80% for European O&P assets and 75% for Intermediates & Derivatives.

Zacks Rank & Key Picks

LYB currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) . 

Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.9%. The company's shares have soared 142.8% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Eldorado’s current-year earnings is pegged at $1.32 per share, indicating a year-over-year rise of 131.6%. EGO, a Zacks Rank #1 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 430.3%. The company's shares have rallied roughly 90.9% in the past year.

Agnico Eagle Mines currently carries a Zacks Rank #2 (Buy). AEM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%. The company's shares have soared 70.1% in the past year.

 

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