Omaha-based Green Plains Renewable Energy Inc., the fourth-biggest U.S. ethanol producer, has agreed to buy Global Ethanol LLC for $169.2 million. Through this transaction, the company will acquire ethanol plants in Lakota, Iowa, and Riga, Mich., with combined annual capacity of 157 million gallons. That gives Green Plains a production capacity of 657 million gallons.

“The industry is in a consolidation mode and this is going to continue,” said Paul Resnik, an analyst at Olympia Capital Markets Group in New York. “At Green Plains they’ve made it very clear that they feel they can achieve economies of scale.”

The acquisition, which includes the assumption of $98.7 million of debt, is expected to close before the end of the year. Selling to a larger company is attractive in an industry that saw about a dozen companies seek bankruptcy protection over an 18-month span starting in 2008, Resnik said.

“There is the realization of volatility in product pricing and margins,” he said. “A lot of people feel they want to be a part of a bigger, stronger organization. It’s kind of tough out there, and you don’t really want to gamble as a smaller company.”