(Bloomberg) — Chevron Corp. is in advanced talks to buy Renewable Energy Group Inc. for about $3 billion, according to people familiar with the matter, as the oil major looks to make a big bet on green diesel.
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Renewable Energy rose more than 36% in after-market trading on the news.
Chevron is discussing paying $61.50 per share for Renewable Energy, said the people, who asked to not be identified because the matter isn’t public. A deal could be announced as soon as next week, the people added. No final decision has been made and the terms could change or talks could still fall through.
Renewable Energy closed up 1.7% to $43.81 in New York trading Friday, giving the company a market value of about $2.2 billion.
Representatives for Chevron and Renewable Energy declined to comment.
The deal would give a significant boost to 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 said last year that it expects to invest $10 billion through 2028 on low-carbon technologies.
Based in Ames, Iowa, Renewable Energy describes itself as North America’s largest producer of advanced biofuels. Led by Chief Executive Officer Cynthia “CJ” Warner, it turns feedstock into fuel at more than a dozen locations in the U.S. and Germany, according to its most recent annual report.
(Updates trading starting second paragraph. Updates comment line in fifth paragraph.)
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