Chevron (CVX) has announced that it is buying biodiesel maker Renewable Energy Group (REGI) in an all-cash deal valued at $3.15 billion U.S.
The acquisition will enable Chevron to boost its clean-energy business, the company said in a news release.
Chevron will pay $61.50 U.S. for each share of Renewable Energy, representing a premium of over 40% to the company’s last closing price.
Major oil firms are facing increasing pressure from governments and investors to join the fight against climate change, given their large contributions to carbon dioxide emissions.
Chevron has set a target to cut operational emissions to net zero by 2050 and last year pledged to invest $10 billion U.S. to reduce its carbon emissions footprint through 2028, with about $3 billion U.S. set aside for investments in renewable fuels.
Ames, Iowa-based Renewable Energy is a producer and supplier of cleaner fuels such as biodiesel and renewable diesel.
The deal is expected to accelerate progress toward Chevron’s goal to grow its renewable fuels production capacity to 100,000 barrels per day by 2030 and brings additional feedstock supplies and pre-treatment facilities, the company said in its written statement.
