Chevron completes acquisition of REG

By Erin Voegele | June 13, 2022

Chevron Corp. on June 13 completed its previously announced acquisition of biofuel producer Renewable Energy Group Inc. The rebranded business segment, Chevron Renewable Energy Group, will remain headquartered in Ames, Iowa.

Chevron in February 2022 announced a definitive agreement to acquire the outstanding shares of REG in an all-cash transaction valued at $3.15 billion, or $61.50 per share. At that time, Chevron said REG’s expertise in feedstocks sourcing and market access are two factors that make the acquisition an attractive way to boost Chevron’s renewable fuels business.

REG stockholders in mid-May approved the agreement to be acquired by Chevron, with more than 80 percent of the shares outstanding and entitled to vote voting in favor of the merger.

“We have brought together companies with complementary capabilities, assets, and customer relationships to make Chevron one of the leading renewable fuels companies in the United States,” said Mark Nelson, executive vice president of Downstream & Chemicals for Chevron. “Chevron now offers our customers an expanded suite of cost-effective, lower carbon solutions that utilize today’s fleets and infrastructure.”

Cynthia “CJ” Warner, former president and CEO of REG, was appointed to Chevron’s board of directors effective June 13.

“CJ Warner has deep experience across both the traditional and renewable energy sectors,” said Mike Wirth, chairman and CEO of Chevron. “Her perspective and guidance will be invaluable as Chevron leverages its strengths to deliver lower carbon energy to a growing world.”

Kevin Lucke has been named president of Chevron Renewable Energy Group. “REG helped establish the U.S. biofuels industry, and together our companies are poised to accelerate the growth of the industry,” he said. “As a native Iowan, I could not be prouder to work with this exceptional group of people who are dedicated to helping provide lower carbon solutions for the transportation sector from right here in the state.”

REG, now Chevron Renewable Energy Group, operates 11 biorefineries in the U.S. and Europe. Together, those facilities produced 480 million gallons of biobased fuel in 2021, which equates to roughly 31,300 barrels per day. Chevron Renewable Energy Group aims to grow its renewable fuels production capacity to 100,000 barrels per day by 2030.

Clean Fuels Alliance America is applauding the acquisition.  “This is a meaningful acquisition for our industry and for Clean Fuels for many reasons,” said Donnell Rehagen, CEO of Clean Fuels, who noted that Iowa-based REG has been an association member since 2006. “REG has been a leader in our industry from its inception, being one of the very first companies to build a biodiesel plant in the United States. This leadership in renewable fuels, coupled with the history and strength in the energy sector Chevron brings, will continue to build on the momentum our industry is experiencing as the country continues on its path of carbon reduction through cleaner fuels.”

Chad Stone, senior vice president of commercial performance at REG, will continue to lead the Clean Fuels governing board as chair. Stone joined the Clean Fuels board in 2015 and said he is pleased to continue as board chair during this dynamic time for REG and Clean Fuels.  “We have been working together for decades to build this industry and never before have we seen such interest or investment in our fuels,” he said. “I am excited to see what the future holds as we join forces to provide fuel solutions that meet the growing demand we’re seeing in the marketplace.”