By Dhirendra Tripathi
Investing.com – Stocks of Renewable Energy Group (NASDAQ:REGI) surged 37% in premarket trading Monday after Chevron (NYSE:CVX) said it is acquiring the company in a $3.15 billion deal.
Chevron is paying $61.50 for each share of Renewable Energy in the all-cash transaction. Renewable shares closed at $43.81 Friday. Chevron shares traded 0.4% higher in premarket after closing 4% Friday.
Renewable claims to be North America’s largest producer of advanced biofuels, turning feedstock into fuel at more than a dozen locations in the U.S. and Germany.
The deal would significantly boost Chevron’s push into renewable fuels, demand for which is expected to grow in the coming years as businesses and governments move away from oil and gas to cut carbon emissions.
Chevron aims to have a renewable fuel production capacity of 100,000 barrels per day by 2030. The deal gets it additional feedstock supplies and pre-treatment facilities, Chevron said in a statement.
Compared to their European counterparts, American energy majors have been a little slow in embracing green and sustainable fuels.
The transaction is expected to close in the second half of 2022.
According to Bloomberg, Chevron, last year, committed to investing $10 billion through 2028 on low-carbon technologies.