Chevron to buy Renewable Energy Group in $3.15B deal

Feb. 28, 2022 7:37 AM ETChevron Corporation (CVX)By: Carl Surran, SA News Editor13 Comments

Group of rows of green stacked biofuel drums in storage warehouse

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Renewable Energy Group (NASDAQ:REGI) +37.3% pre-market after Chevron (NYSE:CVX) agrees to acquire the sustainable fuels producer in an all-cash deal valued at $3.15B.

Under the deal terms, Chevron will pay $61.50/share, a ~40% premium over Friday's $43.81 closing price.

Chevron expects the deal will accelerate its progress toward a goal to boost its renewable fuels production capacity to 100K bbl/day by 2030, and provide additional feedstock supplies and pre-treatment facilities.

Chevron sees the transaction as accretive to its earnings in the first year after closing and accretive to free cash flow after the start-up of Renewable Energy's Geismar expansion.

Upon the deal closing, Chevron's renewable fuels business will be headquartered in Ames, Iowa; Renewable Energy CEO Cynthia Warner will join the Chevron board.

Renewable Energy is set to release Q4 results on March 1.

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