Lynas shares rise on US merger talks

Lynas has been having merger talks with a US rival.

| More on:
Business people standing at a mine site smiling.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Lynas Rare Earths Ltd (ASX: LYC) shares are rising on Monday morning.

At the time of writing, the rare earths producer's shares are up 1% to $5.89.

Why are Lynas shares rising?

Investors have been bidding Lynas shares higher this morning after the company confirmed media reports that it has been in merger talks with a US counterpart.

This morning the company announced the following in response to media speculation:

Lynas confirms it has held confidential discussions with MP Materials Corp (NYSE: MP) regarding a potential transaction.

MP Materials owns and operates Mountain Pass, which is the only integrated rare earth mining and processing site in North America. Its mission is to restore the full rare earth supply chain to the United States of America.

During the third quarter of 2023, it reported 10,766Mt of REO production.

As of Friday's market close on Wall Street, MP Materials had a market capitalisation of A$4.7 billion. This is a touch lower than the Lynas market capitalisation of A$5.45 billion.

This means that if the two rare earths companies were to merge their operations, they would form a $10.15 billion industry giant.

However, it is worth noting that there is no guarantee that Lynas and MP Materials will merge their businesses in the future. Management advised that the transaction discussions between the two parties "are not ongoing."

The company's management then highlighted its organic growth plan. It concludes:

Lynas is implementing a strong organic growth plan. In addition, Lynas continues to seek opportunities to use our proven expertise to build scale, improve market functioning and add value for shareholders.

Despite today's gain, Lynas shares are still down a disappointing 35% over the last 12 months.

Should you invest $1,000 in Lynas Rare Earths Ltd right now?

Before you buy Lynas Rare Earths Ltd shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Lynas Rare Earths Ltd wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended MP Materials. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

Three miners looking at a tablet.
Materials Shares

Buy Rio Tinto shares for a 23% return

Let's see which broker is tipping this mining giant as a top buy.

Read more »

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Materials Shares

Brickworks shares have surged 15% in a month. Are they still good value according to Macquarie?

Here's what this broker has to say about the stock.

Read more »

A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.
Materials Shares

Are Pilbara Minerals shares too cheap to ignore?

A leading broker has given its verdict on this beaten down lithium miner.

Read more »

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

Why is the Core Lithium share price jumping 19% today?

Something is getting investors excited. Let's find out what it is.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

Which is better value right now, Soul Patts or Brickworks shares?

Let's dive in and see what the experts have to say.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Materials Shares

Core Lithium shares charge higher on big news

This lithium miner is starting the week strongly. But why?

Read more »

Lion roaring in the wild, symbolising a rising Liontown share price.
Materials Shares

Why did the Liontown share price rip 19% higher today?

This ASX lithium share was the fastest riser of the ASX 200 today.

Read more »