LyondellBasell Industries (NYSE: LYB – $104.84), one of the world’s largest plastics, chemical and refining companies, announced it has entered into a definitive agreement to purchase a 50 percent stake in Quality Circular Polymers (QCP), a high standard plastics recycling company in Sittard-Geleen, Netherlands. Under the terms of the agreement, LyondellBasell will be a 50/50 partner in QCP with SUEZ, a French company specialized in water and waste management. This transaction marks the first time that a major plastics and chemicals company partners with a leader in resource management to contribute to circular economy objectives. LyondellBasell will market QCP materials following the completion of the transaction, which is subject to regulatory approval by the end of this year.
Diversification and bolt-on acquisitions will be key to Lyondell, as its core product lines have been stagnant over the past few years. This joint venture, along with other potential investments, should jump-start the company’s top line. The Houston-based and Netherlands’s domiciled company has a solid balance sheet and generates sufficient cash flow to make necessary acquisitions and to maintain its above average and growing dividend, currently yielding 3.45%.