Chevron Corp. has agreed to acquire Renewable Energy Group Inc. (REG) in an all-cash transaction valued at $3.15 billion.
The acquisition combines REG’s growing renewable fuels production and feedstock capabilities with Chevron’s manufacturing, distribution, and commercial marketing position.
The transaction is expected to accelerate progress toward Chevron’s goal to grow renewable fuels production capacity to 100,000 b/d by 2030 and brings additional feedstock supplies and pre-treatment infrastructure, Chevron said in a release Feb. 28.
In September 2021, the oil and gas giant said it plans to triple its total capital investment to $10 billion through 2028 to grow its lower carbon energy businesses including growth targets for renewable fuels, hydrogen, and carbon capture through 2030 (OGJ Online, Sept. 14, 2021).
After closing—expected in second-half 2022 subject to REG shareholder approval, regulatory approvals, and customary closing conditions—Chevron’s renewable fuels business, Renewable Fuels - REG, will be headquartered in Ames, Iowa. Cynthia (CJ) Warner, REG’s current president and chief executive officer, is expected to join Chevron’s board of directors.
The transaction is expected to be accretive to Chevron earnings in the first year after closing and accretive to free cash flow after start-up of REG’s 250-million gal/year capacity expansion and improvement project at its existing renewable diesel refinery in Geismar, Ascension Parish, La. (OGJ Online, Nov. 3, 2021).