Green Plains Renewable Energy (GPRE) has announced that it has signed an agreement to acquire Global Ethanol’s two operating ethanol plants located in Lakota, Iowa and Riga, Michigan. The two plants have a combined operating capacity of 157 million gallons per year (mmgy). The acquisition will increase GPRE’s annual production capacity by 31 percent bringing them to an annual ethanol production of 657 mmgy. Once the transaction is closed, Green Plains will market and distribute more than one billion gallons of ethanol production on an annual basis.

The total value of the transaction is estimated to be $169.2 million, including $147.6 million for the ethanol production facilities and the balance in working capital, according to GPRE. In a company statement, the definitive agreement provides that the proposed acquisition will be accomplished through a merger of a newly formed wholly-owned subsidiary of Green Plains with Global. The transaction is expected to close during the 4th Quarter of 2010.

“This transaction demonstrates our ability to make acquisitions at attractive valuations utilizing a combination of our strong balance sheet and our stock, allowing us to meet the differing objectives of ethanol plant owners,” stated Todd Becker, President and CEO of Green Plains Renewable Energy. “The addition of the Global plants enables us to lower our average cost of ethanol production assets and to achieve greater economies of scale in our marketing, risk management and back office operations. We believe this acquisition will be accretive to 2011 earnings. Consistent with our strategy to expand our operations throughout the ethanol value chain, we continue to seek out consolidation opportunities within each of our business segments,” Becker concluded.