Announcement: Moody's comments on Chevron's acquisition of Renewable Energy GroupGlobal Credit Research - 28 Feb 2022New York, February 28, 2022 -- Moody's Investors Service ("Moody's") commented that Chevron Corporation's (Chevron, Aa2 stable) agreement to acquire Renewable Energy Group, Inc. (REG) provides a substantial expansion of its renewable fuels capacity and represents a significant investment in its lower carbon business and tangible example of its energy transition strategy. The $3.15 billion cash purchase price will likely be funded by Chevron's robust free cash flow owing to very high oil and gas prices. REG has cash balances in excess of its outstanding debt, and even on a gross debt basis the acquisition will not having a meaningful effect on Chevron's financial leverage. The transaction has not affected Chevron's ratings or stable outlook.On February 28, 2022, Chevron and REG agreed to an acquisition whereby Chevron will purchase all of REG's outstanding shares for $3.15 billion, or $61.50 per share. REG's cash position exceeds its debt by approximately $400 million. Factoring in this net cash position implies an acquisition value for the business of $2.75 billion. The acquisition is subject to REG shareholder approval, regulatory approvals and other customary closing conditions and is expected to close in the second half of 2022.This acquisition brings REG's experienced management team and its decade-long history as a producer of bio-based diesel, including five years as a producer of renewable diesel at Geismar. REG also benefits from its high process complexity that allows feedstock flexibility in multiple biorefineries, diverse feedstock sourcing, and its ability to access premium demand markets, such as California and Europe, which are at the forefront of the push towards decarbonization. REG is in the midst of capital projects that will substantially expand its renewable fuels capacity at Geismar, and with that growth this acquisition meaningfully moves Chevron towards its goal to grow renewable fuels production capacity to 100,000 barrels per day by 2030.After closing the acquisition, Chevron's renewable fuels business, Renewable Fuels - REG, will be headquartered in Ames, Iowa. In addition, REG's CEO, CJ Warner, is expected to join Chevron's Board of Directors. While Chevron expects to capture synergies amounting to between $50 and $100 million per year, Chevron clearly is focused on adding the knowledge and expertise from REG in renewable diesel to its broader integrated value chain for refined products and future growth in renewable fuels.Chevron Corporation is headquartered in San Ramon, California and is among the world's largest integrated oil and gas companies. Renewable Energy Group, Inc. is one of North America's largest producers of advanced biofuels through converting natural fats, oils and greases into transportation biofuels.This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. Peter Speer Senior Vice President Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. 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