California Resources to merge with Berry in $717m deal

Tue, Sep 16, 2025, 10:20 AM 2 min read

California Resources Corporation (CRC) has agreed to merge with Berry Corporation in an all-stock transaction valuing Berry at around $717m, including its net debt.

Under the deal, Berry shareholders will receive 0.0718 shares of CRC stock for each Berry share, a 15% premium based on closing prices from 12 September.

As per the closing stock prices for the two companies on 12 September, the exchange ratio suggests a combined enterprise value of more than $6bn.

The merger, approved by the boards of both companies, is expected to close in the first quarter of 2026 (Q1 2026), following regulatory and shareholder approvals.

Upon completion of the deal, CRC shareholders will hold 94% of the combined entity, which will be led by CRC’s executive team from its headquarters in Long Beach, California.

CRC intends to refinance Berry’s debt using its cash reserves and credit facilities, issuing new debt based on market conditions, to optimise its financial structure.

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.”

By combining CRC's conventional assets with Berry's oil-weighted reserves, the deal aims to create a more efficient energy company in California, stated CRC.

Together, the companies would have produced around 161,000 barrels of oil equivalent per day in Q2 2025, with substantial proved reserves.

Operational synergies are expected post-merger, with CRC projecting annual cost savings of $80m–90m within a year of closing.

The synergies will primarily arise from corporate efficiencies, lower interest payments and improved operational practices, stated CRC.

CRC’s financial position is expected to remain robust, with a leverage ratio below 1.0x and significant oil production hedged at a $68 per barrel Brent floor price.

Berry's substantial holdings in the Uinta Basin offer strategic and developmental opportunities.

RBC Capital Markets and Petrie Partners served as financial advisors, and Sullivan & Cromwell as legal advisor to CRC.

Guggenheim Securities acted as financial advisor and Vinson & Elkins as legal counsel to Berry.

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.