- Expected to build strength and accelerate growth across
renewable fuels value chain
- Projected to be accretive to earnings and free cash
flow
- Cynthia (CJ) Warner, REG CEO, expected to join Chevron Board
of Directors
Chevron Corporation (NYSE: CVX) and Renewable Energy Group, Inc.
(NASDAQ: REGI) (“REG”) announced today a definitive agreement under
which Chevron will acquire the outstanding shares of REG in an
all-cash transaction valued at $3.15 billion, or $61.50 per
share.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220228005360/en/
The acquisition combines REG’s growing renewable fuels
production and leading feedstock capabilities with Chevron’s large
manufacturing, distribution and commercial marketing position.
“REG was a founder of the renewable fuels industry and has been
a leading innovator ever since,” said Chevron Chairman and CEO Mike
Wirth. “Together, we can grow more quickly and efficiently than
either could on its own.”
The transaction is expected to accelerate progress toward
Chevron’s goal to grow renewable fuels production capacity to
100,000 barrels per day by 2030 and brings additional feedstock
supplies and pre-treatment facilities. After closing of the
acquisition, Chevron’s renewable fuels business, Renewable Fuels -
REG, will be headquartered in Ames, Iowa. In addition, CJ Warner is
expected to join Chevron’s Board of Directors.
“This transaction delivers premium cash value to shareholders
and will give us additional resources as we aim to accelerate
growth and strengthen our collective ability to deliver the
sustainable fuels our customers and the world need,” said CJ
Warner, REG president & CEO. “Our employees’ hard work and
dedication have built a fantastic renewable fuels company and made
this transaction possible. We look forward to joining Chevron’s
team.”
The transaction is expected to be accretive to Chevron earnings
in the first year after closing and accretive to free cash flow
after start-up of REG’s Geismar expansion.
Transaction Details
The acquisition consideration is 100 percent cash. Total
enterprise value of $2.75 billion includes a net cash position
around $400 million greater than debt.
The transaction has been approved by the Boards of Directors of
both companies and is expected to close in the second half of 2022.
The acquisition is subject to REG shareholder approval. It is also
subject to regulatory approvals and other customary closing
conditions.
The transaction price represents a premium of around 57% on a
30-day average based on closing stock prices on February 25,
2022.
Advisors
Goldman Sachs & Co. LLC is acting as financial advisor to
Chevron. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting
as legal advisor to Chevron. Guggenheim Securities, LLC is acting
as financial advisor and Latham & Watkins LLP is acting as
legal advisor to REG.
Conference Call
Chevron will conduct a conference call on Monday, February 28,
2022, at 11:00 a.m. ET to discuss the transaction.
A webcast of the discussion will be available in a listen-only
mode to individual investors, media, and other interested parties
on Chevron’s website at www.chevron.com under the “Investors”
section, or by calling 800-822-4794 and providing the conference ID
5949818. Additional materials will be available under “Events and
Presentations” in the “Investors” section on the Chevron
website.
About Chevron
Chevron is one of the world’s leading integrated energy
companies. We believe affordable, reliable and ever-cleaner energy
is essential to achieving a more prosperous and sustainable world.
Chevron produces crude oil and natural gas; manufactures
transportation fuels, lubricants, petrochemicals and additives; and
develops technologies that enhance our business and the industry.
We are focused on lowering the carbon intensity in our operations
and seeking to grow lower carbon businesses along with our
traditional business lines. More information about Chevron is
available at www.chevron.com.
About Renewable Energy Group
Renewable Energy Group is leading the energy and transportation
industries’ transition to sustainability by converting renewable
resources into high-quality, sustainable fuels. REG is an
international producer of sustainable fuels that significantly
lower greenhouse gas emissions to immediately reduce carbon impact.
REG utilizes a global integrated procurement, distribution, and
logistics network to operate 11 biorefineries in the U.S. and
Europe. In 2020, REG produced 519 million gallons, or 1.7 million
metric tons, of cleaner fuel delivering 4.2 million metric tons of
carbon reduction. REG is meeting the growing global demand for
lower-carbon fuels and leading the way to a more sustainable
future.
NOTICE
As used in this document, the term “Chevron” and such terms as
“the company,” “the corporation,” “our,” “we,” “us” and “its” may
refer to Chevron Corporation, one or more of its consolidated
subsidiaries, or to all of them taken as a whole. All of these
terms are used for convenience only and are not intended as a
precise description of any of the separate companies, each of which
manages its own affairs. Terms such as “resources” may be used in
this document to describe certain aspects of Chevron’s portfolio
and oil and gas properties beyond the proved reserves. For
definitions of, and further information regarding, this and other
terms, see the “Glossary of Energy and Financial Terms” on pages 24
through 25 of Chevron’s 2021 Supplement to the Annual Report
available at chevron.com. All materials are posted on chevron
com under the headings “Investors,” “Events &
Presentations.”
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This document contains forward-looking statements. These
forward-looking statements generally include statements regarding
the potential transaction between Chevron and Renewable Energy
Group, Inc. (“REG”), including any statements regarding the
expected timetable for completing the potential transaction, the
ability to complete the potential transaction, the expected
benefits of the potential transaction (including anticipated
accretion to earnings and free cash flow and anticipated EBITDA),
future opportunities, and any other statements regarding Chevron’s
or REG’s future expectations, beliefs, plans, objectives, results
of operations, financial condition and cash flows, or future events
or performance. Words or phrases such as “anticipates,” “expects,”
“intends,” “plans,” “targets,” “advances,” “commits,” “drives,”
“aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,”
“schedules,” “estimates,” “positions,” “pursues,” “may,” “can,”
“could,” “should,” “will,” “budgets,” “outlook,” “trends,”
“guidance,” “focus,” “on track,” “goals,” “objectives,”
“strategies,” “opportunities,” “poised,” “potential,” “ambitions,”
“aspires” and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties
and other factors, many of which are beyond the companies’ control
and are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed or forecasted
in such forward-looking statements. The reader should not place
undue reliance on these forward-looking statements, which speak
only as of the date thereof. Unless legally required, Chevron and
REG undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise. Among the important factors that could cause actual
results to differ materially from those in the forward-looking
statements include the ability to obtain the requisite REG
stockholder approval; uncertainties as to the timing to consummate
the potential transaction; the risk that a condition to closing the
potential transaction may not be satisfied; the effects of
disruption to Chevron’s or REG’s respective businesses; the effect
of this communication on Chevron’s or REG’s stock prices and REG’s
ability to retain and hire key personnel and maintain relationships
with its customers, suppliers and others with whom it does
business; the effects of industry, market, economic, political or
regulatory conditions outside of Chevron’s or REG’s control;
Chevron’s ability to achieve the benefits from the proposed
transaction; the nature, cost and outcome of any litigation and
other legal proceedings, including any such proceedings related to
the proposed transaction and instituted against REG and Chevron;
and unknown liabilities. Other important factors that could cause
actual results to differ materially from those in the
forward-looking statements are: changing crude oil, natural gas and
feedstock prices and demand for the companies' products, and
production curtailments due to market conditions; crude oil
production quotas or other actions that might be imposed by the
Organization of Petroleum Exporting Countries and other producing
countries; technological advancements; changes to government
policies in the countries in which the companies operate; public
health crises, such as pandemics (including coronavirus (COVID-19))
and epidemics, and any related government policies and actions;
disruptions in the companies’ global supply chain, including supply
chain constraints and escalation of the costs of goods and
services; changing economic, regulatory and political environments
in the various countries in which the companies operate; general
domestic and international economic and political conditions;
changing refining, marketing and chemicals margins; actions of
competitors or regulators; timing of exploration expenses; timing
of crude oil liftings; the competitiveness of alternate-energy
sources or product substitutes; development of large carbon capture
and offset markets; the results of operations and financial
condition of the companies’ suppliers, vendors, partners and equity
affiliates, particularly during the COVID-19 pandemic; the
inability or failure of Chevron’s joint-venture partners to fund
their share of operations and development activities; the potential
failure to achieve expected net production from existing and future
crude oil and natural gas development projects; potential delays in
the development, construction or start-up of planned projects; the
potential disruption or interruption of the companies’ operations
due to war, accidents, political events, civil unrest, severe
weather, cyber threats, terrorist acts, or other natural or human
causes beyond the companies’ control; the potential liability for
remedial actions or assessments under existing or future
environmental regulations and litigation; significant operational,
investment or product changes undertaken or required by existing or
future environmental statutes and regulations, including
international agreements and national or regional legislation and
regulatory measures to limit or reduce greenhouse gas emissions;
the potential liability resulting from pending or future
litigation; Chevron’s future acquisitions or dispositions of assets
or shares or the delay or failure of such transactions to close
based on required closing conditions; the potential for gains and
losses from asset dispositions or impairments; government mandated
sales, divestitures, recapitalizations, taxes and tax audits,
tariffs, sanctions, changes in fiscal terms or restrictions on the
scope of the companies’ operations; foreign currency movements
compared with the U.S. dollar; material reductions in corporate
liquidity and access to debt markets; the receipt of required Board
authorizations to implement capital allocation strategies,
including future stock repurchase programs and dividend payments;
the effects of changed accounting rules under generally accepted
accounting principles promulgated by rule-setting bodies; Chevron’s
ability to identify and mitigate the risks and hazards inherent in
operating in the global energy industry; and the factors set forth
under the heading “Risk Factors” on pages 20 through 25 of
Chevron’s Annual Report on Form 10-K for the year ended December
31, 2021 and in other subsequent filings with the U.S. Securities
and Exchange Commission (“SEC”), as well as the factors set forth
under the heading “Risk Factors” of REG’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2021 and REG’s
Annual Report on Form 10-K for the year ended December 31, 2020 and
in other subsequent filings with the SEC. Other unpredictable or
unknown factors not discussed in this document could also have
material adverse effects on forward-looking statements.
Additional Information and Where to Find It
This communication is being made in respect to the proposed
transaction involving REG, Cyclone Merger Sub Inc. (“Merger
Subsidiary”) and Chevron. A meeting of the stockholders of REG will
be announced as promptly as practicable to seek stockholder
approval in connection with the proposed transaction. REG expects
to file with the SEC a proxy statement and other relevant documents
in connection with the proposed transaction. The definitive proxy
statement will be sent or given to the stockholders of REG and will
contain important information about the proposed transaction and
related matters. INVESTORS AND STOCKHOLDERS OF REG ARE URGED TO
READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT REG AND THE PROPOSED
TRANSACTION. Investors may obtain a free copy of these materials
(when they are available) and other documents filed by REG with the
SEC at the SEC’s website at www.sec.gov.
REG and certain of its directors, executive officers and other
members of management and employees may be deemed to be
participants in soliciting proxies from its stockholders in
connection with the Merger. Information regarding the persons who
may, under the rules of the SEC, be considered to be participants
in the solicitation of REG’s stockholders in connection with the
proposed transaction will be set forth in REG’s definitive proxy
statement for its stockholder meeting at which the proposed
transaction will be submitted for approval by REG’s stockholders
and the Annual Report on Form 10-K for the fiscal year ended
December 31, 2021. You may also find additional information about
REG’s directors and executive officers in REG’s definitive proxy
statement for its 2021 annual meeting of stockholders, which was
filed with the SEC on April 5, 2021 and in subsequently filed
Current Reports on Form 8-K and Quarterly Reports on Form 10-Q.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220228005360/en/
Investor Contacts: Roderick Green Chevron
invest@chevron.com
Todd Robinson REG 515-766-8906
Media Contacts: Tyler Kruzich Chevron 925-549-8686
tkruzich@chevron.com
Katie Stanley REG 515-357-8095
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