LyondellBasell (LYB) Enters Into Deal to Buy 35% of NATPET
LyondellBasell Industries N.V. LYB stated that it has reached an agreement to buy a 35% stake in Saudi Arabia-based National Petrochemical Industrial Company ("NATPET") from Alujain Corporation for about $500 million. The joint venture, enabled by its Spheripol polypropylene (PP) technology, will allow LYB to grow and enhance its core PP business by providing access to advantageous feedstocks as well as more product marketing capacity in a critical region.
The deal is subject to regulatory and customary closing conditions. Alujain and LYB are also considering the construction of a new propylene via propane dehydrogenation and PP factory at the NATPET site, subject to a final investment decision. The project is being examined with the common goal of implementing solutions that match the Kingdom of Saudi Arabia's 2060 carbon reduction policy.
This investment in NATPET underscores LyondellBasell's goal of expanding and modernizing its core assets and businesses with long-term benefits.
This joint venture makes use of LYB's technology, leading global market positioning and Alujain's operational expertise. LyondellBasell expects it to provide value through both ownership and product marketing in important locations.
Shares of LyondellBasell have gained 3.5% over the past year against 12.9% decline of its industry.
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The company, on its third-quarter call, said that it expects seasonally lower demand across most industries in the fourth quarter. Higher feedstock costs, new industry capacity and slowing demand growth in China continue to put pressure on global olefins and polyolefins margins. Following the end of the summer driving season, oxyfuels and refining margins are projected to fall.
Nonetheless, oxyfuel margins are expected to remain significantly higher than historical averages. LyondellBasell plans to operate its assets in line with market demand during the fourth quarter, with average operating rates of 85% for North American olefins and polyolefins (O&P) assets, 75% for European O&P assets and 70% for Intermediates & Derivatives assets.
LyondellBasell Industries N.V. Price and Consensus
LyondellBasell Industries N.V. price-consensus-chart | LyondellBasell Industries N.V. Quote
Zacks Rank & Key Picks
LyondellBasell currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include The Andersons Inc. ANDE, Cal-Maine Foods Inc. CALM and Steel Dynamics Inc. STLD.
Andersons currently carries a Zacks Rank #1 (Strong Buy). ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. The company’s shares have surged 42.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
CalMaine Foods currently carries a Zacks Rank #1. CALM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 131.5%. The company’s shares have inched up 3.9% in the past year.
The Zacks Consensus Estimate for Steel Dynamics’ current-year earnings has been revised upward by 4.3% in the past 60 days. It currently carries a Zacks Rank #1. Steel Dynamics delivered a trailing four-quarter earnings surprise of roughly 6.5%, on average. STLD shares are up around 1.3% in a year.
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