Why Rice Acquisition Stock Soared Today


What happened

Rice Acquisition (NYSE:RICE) announced a business combination with two renewable energy companies Thursday. The news sent the stock of the special purpose acquisition company (SPAC) soaring more than 40% at the market open. Shares pared those gains, but remained up 31.1% as of 10:20 a.m. EDT. 

So what

Rice announced it plans to lead a business combination of Aria Energy and Archaea Energy to create the leading U.S. renewable natural gas (RNG) platform. The merger will value the combined company at $1.15 billion, and is expected to close in the third quarter of 2021. It will take the Archaea Energy name, and focus on reducing carbon emissions through landfill gas conversion, CO2 sequestration, and green hydrogen.

landfill-to-energy plant creating renewable natural gas

A landfill-to-energy facility that produces renewable natural gas. Image source: Getty Images.

Now what

Aria Energy is one of North America’s largest companies in the landfill gas (LFG) sector, converting the feedstock to RNG. Archaea believes it currently has higher demand through its existing partnerships than the entire RNG production in the market today. It said RNG volume from the newly combined company will be 60%, and possibly more than 70%, contracted under fixed-price arrangements with investment-grade customers.  

READ:  Could the Pandemic Pet Surge Make Investors in This Stock Rich?

The contracted business should limit earnings volatility. Additionally, U.S. landfill waste is expected to grow for the next 20 to 30 years, creating up to 60 years of LFG feedstock availability, the companies said in a joint statement. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/04/08/why-rice-acquisition-stock-soared-today/

Xem thêm bài viết thuộc chuyên mục: investing

Related Articles

Leave a Reply

Back to top button