Highlights:
- Chevron enters into a definitive agreement to acquire Renewable Energy Group in an all-cash deal valued at $3.15 billion, or $61.50 per share.
- Projected to drive company earnings and free-cash-flow.
- This deal will accelerate growth across Chevron’s renewable energy value chain.
On Monday February 28th, 2022, Chevron Corporation (NYSE: CVX) entered into a definitive agreement to acquire all outstanding shares of Renewable Energy Group (NASDAQ: REGI). The deal aims to drive business and accelerate Chevron’s transition into more sustainable energy.
Chevron will take full ownership of the company, valued at $3.15 billion. Cynthia (CJ) Warner, REG CEO, will join Chevron’s board of directors.
The purchase of REG will allow Chevron to consolidate their growing renewable fuels business, with large commercial distribution and manufacturing. This transaction will help accelerate Chevron’s goal of reaching 100,000 barrels per day of renewable energy fuel production by 2030.
“REG was a founder of the renewable fuels industry and has been a leading innovator ever since. Together, we can grow more quickly and efficiently than either could on its own.” Mike Wirth, Chairman & CEO said in a statement.
This consolidation serves as the beginning of oil and gas companies’ transition to more sustainable energy sources. REG allows Chevron to access their large distribution network and production capacity of renewable fuels. Furthermore, the deal will bring additional feedstock supply and pretreatment facilities, while generating robust free-cash-flow.
The transaction has been approved by the board of directors of both companies, expected to close in the second half of 2022.
Disclosure: The author holds no position in Chevron Corporation or Renewable Energy Group, Inc. Freedom Stocks has a disclosure policy.
