Posted 5/21/2014 03:59 pm
Updated 7 months ago
Renewable Energy Group Inc. has reached an agreement with Tyson Foods Inc. of Springdale to acquire Tyson’s 50 percent ownership of Dynamic Fuels LLC, the companies announced Wednesday.
The deal, contingent upon REG's previously announced acquisition of Syntroleum Corp., would give REG full ownership of Dynamic Fuels and its 75 million gallon per year renewable diesel biorefinery in Geismar, Louisiana.
Tyson and Syntroleum formed Dynamic Fuels in 2007 as a 50-50 joint venture. The Geismar facility, completed in 2010, was the first large scale renewable diesel biorefinery built in the U.S.
"Upon closing, this is another milestone for REG in growing our core advanced biofuels business," Daniel J. Oh, REG's president and CEO. "It gives us the opportunity to further expand our production capacity into new product lines, while growing our overall advanced biofuel manufacturing capability, and bringing on other renewable chemical applications."
In a news release, Tyson Foods said selling its stake in the company will allow it to invest in other opportunities.
"REG is a long-term customer of ours, buying fats, oils and greases to make renewable fuel, and we hope to continue that relationship," Andrew Rojeski, Tyson's vice president of renewable energy, said.
Per the deal, REG will pay Tyson Foods about $18 million in cash and up to $35 million in future payments tied to production volume at Geismar for up to 11 and a half years. REG will also fund repayment of about $12 million of Dynamic Fuels' indebtedness to Tyson Foods.
REG owns eight operating biodiesel refineries in Iowa, Illinois, Minnesota and Texas.