In an effort to accelerate growth in renewable fuel production, Chevron has entered into a definitive agreement to acquire Renewable Energy Group for about $3.15 billion.

The acquisition combines REG’s growing renewable fuels production and feedstock capabilities with Chevron’s manufacturing, distribution and commercial marketing position.

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, president and CEO of REG, is expected to join Chevron’s board.

“REG was a founder of the renewable fuels industry and has been a leading innovator ever since,” said Chevron Chairman and CEO Mike Wirth in a press release. “Together, we can grow more quickly and efficiently than either could on its own.”

The transaction has been approved by the board 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.