Chevron will buy the biofuels company Renewable Energy Group for $3.15 billion, the companies announced on Feb. 28.

Through the acquisition, Chevron aims to grow its renewable fuels production capacity to 100,000 per day by 2030. Renewable Energy Group operates 11 biorefineries in the U.S. and Europe and produced 519 million gallons of biofuels in 2020.

Chevron CEO Mike Wirth said the acquisition allows the company to "grow more quickly and efficiently" than it could on its own.

The $3.15 billion all-cash acquisition represents a premium of 57% of the Renewable Energy Group's average stock price over the past month. The deal is expected to close in the second half of 2022.

Renewable Energy Group will become Renewable Fuels - REG under the Chevron umbrella, according to a news release. The company will be headquartered in Ames, Iowa.