February 28 (Renewables Now) – US oil big Chevron Corp (NYSE:CVX) has struck a USD-3.15-billion (EUR 2.8bn) deal to take over Renewable Power Group Inc (NASDAQ:REGI) in pursuit of its goal to develop renewable fuels manufacturing capability to 100,000 barrels per day by 2030.
The transaction will mix Chevron’s massive manufacturing, distribution and business advertising place with REG’s rising renewable fuels manufacturing and robust feedstock capabilities.
At current, REG operates 11 biorefineries within the US and Europe, and in 2020 produced 519 million gallons of cleaner gasoline.
Chevron’s chairman and CEO Mike Wirth commented that the 2 firms can develop extra rapidly collectively than if they continue to be on their very own.
“This transaction delivers premium money worth to shareholders and can give us further assets as we purpose to speed up development and strengthen our collective means to ship the sustainable fuels our prospects and the world want,” stated CJ Warner, president and CEO of REG.
As a part of the settlement, Chevron can pay USD 61.50 per share in money, which is a 57% premium on a 30-day common primarily based on closing inventory costs on February 25, 2022.
Chevron expects this acquisition to construct on its earnings within the first yr following the closing of the transaction and to be accretive to free money stream after completion of REG’s enlargement of the Geismar biorefinery in Louisiana.
REG Geismar was the nation’s first renewable diesel plant and was acquired by the corporate in 2014. In October 2020, REG introduced it deliberate to increase the annual manufacturing capability of the actual facility by 250 million gallons to 340 million gallons. On the time, it estimated the undertaking value at USD 825 million.
Topic to approval from REG’s shareholders and regulators, Chevron’s acquisition of the corporate ought to shut within the second half of the yr.
Goldman Sachs & Co LLC is performing as monetary advisor to Chevron, whereas Paul, Weiss, Rifkind, Wharton & Garrison LLP serves as its authorized advisor. Guggenheim Securities LLC in flip is the monetary advisor of REG and Latham & Watkins LLP is its authorized advisor.
(USD 1.0 = EUR 0.894)
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