California Sources Company (CRC) has agreed to merge with Berry Company in an all-stock transaction valuing Berry at round $717m, together with its web debt.
Beneath the deal, Berry shareholders will obtain 0.0718 shares of CRC inventory for every Berry share, a 15% premium primarily based on closing costs from 12 September.
As per the closing inventory costs for the 2 firms on 12 September, the change ratio suggests a mixed enterprise worth of greater than $6bn.
The merger, authorised by the boards of each firms, is predicted to shut within the first quarter of 2026 (Q1 2026), following regulatory and shareholder approvals.
Upon completion of the deal, CRC shareholders will maintain 94% of the mixed entity, which will probably be led by CRC’s government staff from its headquarters in Lengthy Seashore, California.
CRC intends to refinance Berry’s debt utilizing its money reserves and credit score services, issuing new debt primarily based on market situations, to optimise its monetary construction.
CRC president and CEO Francisco Leon stated: “The mixture of CRC and Berry will create a stronger, extra environment friendly California power chief.
“The transaction is attractively valued and instantly accretive throughout key monetary metrics, strengthening our capacity to ship sustainable worth to shareholders.
“By realising substantial company and working synergies, we count on to considerably decrease prices and generate larger free money movement.”
By combining CRC’s typical property with Berry’s oil-weighted reserves, the deal goals to create a extra environment friendly power firm in California, acknowledged CRC.
Collectively, the businesses would have produced round 161,000 barrels of oil equal per day in Q2 2025, with substantial proved reserves.
Operational synergies are anticipated post-merger, with CRC projecting annual price financial savings of $80m–90m inside a 12 months of closing.
The synergies will primarily come up from company efficiencies, decrease curiosity funds and improved operational practices, acknowledged CRC.
CRC’s monetary place is predicted to stay sturdy, with a leverage ratio beneath 1.0x and vital oil manufacturing hedged at a $68 per barrel Brent flooring value.
Berry’s substantial holdings within the Uinta Basin supply strategic and developmental alternatives.
RBC Capital Markets and Petrie Companions served as monetary advisors, and Sullivan & Cromwell as authorized advisor to CRC.
Guggenheim Securities acted as monetary advisor and Vinson & Elkins as authorized counsel to Berry.
Berry’s board chair, Renée Hornbaker, stated: “The economic logic of this merger will permit Berry shareholders to profit from the creation of a bigger and extra sustainable enterprise, with an improved capital construction and vital operational synergies.
