California Resources Corporation (CRC) has entered into a definitive agreement to merge with Berry Corporation in an all-stock transaction valuing Berry at approximately US$717 million, including net debt.
Under the terms of the deal, Berry shareholders will receive 0.0718 shares of CRC stock for each share held, representing a 15 per cent premium based on the two companies’ closing share prices on 12 September.
The transaction, unanimously approved by the boards of both companies, suggests a combined enterprise value exceeding US$6 billion and is expected to close in the first quarter of 2026, subject to regulatory and shareholder approvals.
Following completion, CRC shareholders will own around 94 per cent of the combined company, which will be headquartered in Long Beach, California and led by CRC’s existing executive management team.
CRC plans to refinance Berry’s outstanding debt through a mix of cash reserves, credit facilities, and possible new debt issuances, depending on market conditions.
CRC president and CEO Francisco Leon said: “The combination of CRC and Berry will create a stronger, more efficient California energy leader.
“The transaction is attractively valued and immediately accretive across key financial metrics, strengthening our ability to deliver sustainable value to shareholders.
“By realising substantial corporate and operating synergies, we expect to significantly lower costs and generate higher free cash flow.”
The merger will integrate CRC’s conventional asset base with Berry’s oil-weighted reserves, with the combined entity having produced around 161,000 barrels of oil equivalent per day in the second quarter of 2025.
The companies have reported strong proven reserves and forecast substantial operational synergies, with CRC expecting annual cost savings of between US$80 million and US$90 million within a year of closing.
Savings are expected to arise largely from corporate efficiencies, reduced interest payments, and streamlined operating practices.
CRC said it will maintain a strong balance sheet post-transaction, projecting a leverage ratio below 1.0x.
It also noted that a significant portion of its oil production is already hedged at a floor price of $68 per barrel Brent.
Berry’s assets in the Uinta Basin are expected to deliver long-term strategic and developmental opportunities for the combined entity.
Berry’s board chair, Renée Hornbaker, said: “The industrial logic of this merger will allow Berry shareholders to benefit from the creation of a larger and more sustainable business, with an improved capital structure and significant operational synergies.
“Additionally, the strong tailwinds we are seeing on the regulatory front makes this the right time to consummate this merger.
“The combined company will ensure our communities have access to safe, reliable and affordable energy through responsible in-state production, all while delivering significant long-term value for shareholders.”