Chevron Corporation (NYSE: CVX) and Renewable Energy Group, Inc. (NASDAQ: REGI) (REG) announced on Monday a definitive agreement under which Chevron will acquire the outstanding shares of REG in an all-cash transaction valued at $3.15 billion, or $61.50 per share.
The acquisition combines REG’s growing renewable fuels production and leading feedstock capabilities with Chevron’s large manufacturing, distribution, and commercial marketing position.
The takeover comes as US oil refiners, transitioning to renewable diesel production, compete for strategic advantages and limited low carbon feedstock resources.
“REG was a founder of the renewable fuels industry and has been a leading innovator ever since”, said Chevron Chairman and CEO Mike Wirth. “Together, we can grow more quickly and efficiently than either could on its own.”
Renewable Energy Group is the largest biodiesel producer by volume in the United States – as well as a producer and supplier of many other products. REG operates 11 biorefineries in the US and Europe. In 2020, REG produced 519 million gallons, or 1.7 million tonnes, of biofuel delivering 4.2 million tonnes of carbon reduction.
Renewable Energy Group is expected to release fourth quarter and full year 2021 financial results Tuesday, March 1, 2022.
Chevron expects to have the capacity to produce 100,000 barrels per day of renewable diesel and sustainable aviation fuel (SAF) by 2030 and to have all their US diesel sales include renewable or biodiesel content by the end of the decade. This transaction is expected to accelerate Chevron’s progress toward its goal.
“This transaction delivers premium cash value to shareholders and will give us additional resources as we aim to accelerate growth and strengthen our collective ability to deliver the sustainable fuels our customers and the world need”, said CJ Warner, REG president & CEO. “Our employees’ hard work and dedication have built a fantastic renewable fuels company and made this transaction possible. We look forward to joining Chevron’s team.”
The transaction is expected to be accretive to Chevron earnings in the first year after closing and accretive to free cash flow after the start-up of REG’s Geismar expansion. The transaction has been approved by the Boards of Directors of both companies and is expected to close in the second half of 2022. The acquisition is subject to REG shareholder approval. It is also subject to regulatory approvals and other customary closing conditions.
By Robert Lane
Source: fastmarkets.com
PepsiCo Europe and crop nutrition company Yara have announced a long-term partnership aimed at providing European farmers with low-carbon crop nutrition solutions to help decarbonise the food value chain. Under the agreement, Yara will supply PepsiCo with up to 165,000 tons of fertiliser per year by 2030, covering around 25% of the food and beverage giant’s crop fertiliser needs across Europe.
BASF has signed an agreement to sell its flocculants business for mining applications to Solenis, a specialty chemicals manufacturer. The divestment of the flocculants business to Solenis is part of BASF’s ongoing portfolio optimisation with the aim of focusing on strategic core areas.
ADAMA Ltd. a leading crop protection company, announced that its board of directors has appointed Gaël Hili as its President and Chief Executive Officer, effective October 1, 2024. Hili will join the Syngenta Group Leadership Team and will be based in Tel Aviv.
