Green Plains Renewable Energy, an ethanol producer in North America, has entered into an agreement to acquire Global Ethanol to increase its production capacity.

Global Ethanol owns two operating ethanol plants located in Lakota and Riga, Michigan, and have a combined annual production capacity of approximately 157 million gallons.

The acquisition will increase Green Plains’ capacity by 31% to approximately 657 million gallons, and once the transaction is closed, it will market and distribute more than one billion gallons of ethanol production on an annual basis, the company said.

Green Plains estimates the total value of the transaction at approximately $169.2m, including about $147.6m for the ethanol production facilities and the balance in working capital.

The agreement provides that the proposed acquisition will be accomplished through a merger of a newly formed subsidiary of Green Plains with Global Ethanol.

The closing of the transaction is expected in the fourth quarter of this year.