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    1. Renewables

    Chevron to acquire Biodiesel developer REG for $3.15 billion

    March 2, 2022
    Biodiesel emits less than half of the greenhouse gas emissions as petroleum diesel. Biodiesel is produced from agricultural waste and food crops
    Image credit Shizhao--Wikipedia Creative Commons
    Biodiesel 621f710f4b22f

    Integrated oil and gas firm Chevron has signed a definitive agreement to acquire the outstanding shares of Renewable Energy Group, a biodiesel production firm, in a $3.15 billion all-cash transaction.

    The transaction is expected to close in the second half of this year, subject to REG shareholder approval, regulatory approvals and other customary closing conditions. The Board of Directors of both the companies have granted approval for the transaction.

    The total enterprise value of $2.75 billion includes a net cash position of around $400 million more than debt. The transaction price represents a premium of 57% on the 30-day average based on the closing stock prices as on 25 February.

    The transaction is expected to contribute to Chevron’s progress towards its goal of increasing renewable fuels production capacity to 100,000 barrels per day by 2030. It will also add pre-treatment facilities and feedstock supplies with the addition of REG’s feedstock and fuel production.

    Chevron CEO Mike Wirth has pointed to Ames, Iowa-based REG and biodiesel as a key to his company's shift to lower carbon and renewable resources. Biodiesel emits less than half of the greenhouse gas emissions as petroleum diesel.

    Biodiesel is produced from agricultural waste and food crops.

    Goldman Sachs & Co. LLC is the financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP is the legal advisor to Chevron. Meanwhile, Guggenheim Securities is the financial advisor and Latham & Watkins LLP is the legal advisor to REG.

    About the Author

    EnergyTech Staff

    Rod Walton is senior editor for EnergyTech.com. He has spent 14 years covering the energy industry as a newspaper and trade journalist.

    Walton formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.

    He can be reached at [email protected]. 

    EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids.

    Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.