CRC to Acquire BRY in All-Stock Merger Strengthening Asset Portfolio

Core Viewpoint - California Resources Corporation (CRC) has entered into a merger agreement with Berry Corporation (BRY) in an all-stock deal valued at approximately $717 million, including Berry's net debt, aimed at unlocking operational synergies and improving cash flow generation for the combined entity [1] Asset Synergies - Following the merger, California Resources shareholders will own approximately 94% of the combined firm, enhancing CRC's asset portfolio with high-quality, conventional oil-weighted production assets that complement its existing low-decline assets in California [2] - The acquisition includes C&J Well Services, a subsidiary of BRY, which will aid CRC in maintaining active wells and improving long-term operational efficiency, as well as enhancing well abandonment capabilities and managing cost inflation [2] Financial Impact - The merger is expected to be immediately accretive to significant financial metrics, including free cash flows and net operating cash flow, making it attractive to CRC shareholders [4] - CRC anticipates achieving $80-$90 million in annual synergies within a year of the deal's conclusion, with 50% of run-rate synergies expected within six months post-closing, driven by operational efficiencies and debt refinancing [4] Transaction Details - BRY shareholders will receive 0.0718 shares of CRC common stock for each Berry common stock, and CRC plans to refinance Berry's debt through a mix of cash and borrowings, potentially issuing more debt to strengthen its balance sheet [5] - The deal is expected to conclude in the first quarter of 2026, pending customary closing conditions [5]