Chevron Company and Renewable Vitality Group introduced a definitive settlement underneath which Chevron will purchase the excellent shares of REG in an all-cash transaction valued at $3.15 billion, or $61.50 per share.
The acquisition combines REG’s rising renewable fuels manufacturing and main feedstock capabilities with Chevron’s massive manufacturing, distribution and business advertising place.
REG was a founding father of the renewable fuels trade and has been a number one innovator ever since. Collectively, we are able to develop extra shortly and effectively than both might by itself.
—Chevron Chairman and CEO Mike Wirth
The transaction is predicted to speed up progress towards Chevron’s objective to develop renewable fuels manufacturing capability to 100,000 barrels per day by 2030 and brings extra feedstock provides and pre-treatment services. After closing of the acquisition, Chevron’s renewable fuels enterprise, Renewable Fuels – REG, might be headquartered in Ames, Iowa. As well as, REG president & CEO CJ Warner is predicted to affix Chevron’s Board of Administrators.
The transaction is predicted to be accretive to Chevron earnings within the first yr after closing and accretive to free money stream after start-up of REG’s Geismar growth.
Transaction particulars. The acquisition consideration is 100% money. Complete enterprise worth of $2.75 billion features a web money place round $400 million higher than debt.
The transaction has been accepted by the Boards of Administrators of each firms and is predicted to shut within the second half of 2022. The acquisition is topic to REG shareholder approval. It is usually topic to regulatory approvals and different customary closing circumstances.
The transaction value represents a premium of round 57% on a 30-day common primarily based on closing inventory costs on 25 February 2022.