California Resources, Berry Corporation to combine in all-stock transaction

California Resources Corporation (CRC) and Berry Corporation (BRY) jointly announced their entry into a definitive agreement to combine in an all-stock transaction valuing Berry at approximately $717M, inclusive of Berry’s net debt. Under the terms of the merger agreement, existing CRC shareholders are expected to own approximately 94% of the combined company upon closing. The combination is expected to be accretive to net cash provided by operating activities and free cash flow. It is priced at approximately 2.9x enterprise value / 2025E adjusted EBITDAX with projected second half 2025 per share accretion to both net cash provided by operating activities and free cash flow of more than 10% before estimated synergies. within 12 months post closing, CRC expects to achieve annual synergies of $80 – 90M, or approximately 12% of the transaction value. Approximately 50% of the run-rate synergies are expected to be implemented within six months of closing and the remaining 50% of synergies are anticipated within 12 months. Synergies are expected to primarily come through corporate synergies, lower interest costs through debt refinancing, operating improvements and supply chain efficiencies. Berry shareholders will receive a fixed exchange ratio of 0.0718 shares of CRC common stock for each share of BRY common stock owned, representing a premium of 15% based on the closing prices of the stocks on Friday, September 12, 2025. Based on the closing stock prices for CRC and Berry on September 12, 2025, the exchange ratio implies an enterprise value for the combined entity of more than $6 billion1. CRC plans to refinance Berry’s outstanding debt with cash on hand and borrowings under its Credit Agreement and may also pursue a new debt issuance, subject to market conditions, to further optimize its balance sheet and support long-term capital allocation priorities. CRC’s strong balance sheet and liquidity position provides flexibility regarding refinancing options and timing. The transaction, which is expected to close in the first quarter of 2026, has been unanimously approved by the board of directors of both companies. Closing is subject to customary closing conditions, including receipt of required regulatory approvals and receipt of Berry shareholder approval. CRC’s executive management team will lead the combined company from its headquarters in Long Beach, California. Following the close of the transaction, CRC will provide additional financial and operating guidance for the combined company.