In a significant corporate move, California Resources Corporation (CRC) has announced its intention to acquire Berry Corporation (BRY) through a merger agreement dated September 14, 2025. Under this agreement, Dornoch Merger Sub, LLC, a direct, wholly-owned subsidiary of CRC, will merge with and into Berry, thereby making Berry a direct, wholly-owned subsidiary of CRC.
The financial terms of the merger stipulate that Berry stockholders will receive approximately 0.0718 shares of CRC Common Stock for each share of Berry Common Stock they own. Based on CRC's stock price of $53.00 per share on September 12, 2025, the implied value of the transaction is around $3.81 per share for Berry stockholders. As the deal is contingent on market fluctuations, the value may vary until completion.
The strategic rationale behind this merger focuses on enhancing operational efficiencies and expanding CRC's asset base in the oil and gas sector. By merging with Berry, CRC aims to leverage Berry's existing operations and infrastructure, which could lead to increased production capabilities and a stronger market presence in California's competitive energy landscape.
The merger is expected to close following the approval of Berry stockholders, who are invited to vote on several proposals at a special virtual meeting. The specific date for this meeting is yet to be announced, but it will occur after the registration statement is declared effective by the SEC. Berry's board of directors has unanimously recommended that stockholders approve the merger, citing that the transaction is in the best interests of all parties involved.
Market implications of this merger could be significant for shareholders, as the combined entities may yield improved financial performance and stability in a fluctuating market. However, stockholders are advised to review the accompanying proxy statement/prospectus for potential risks associated with the merger.
Regulatory considerations will also play a critical role in this transaction. The merger is subject to customary closing conditions, including regulatory approvals and the satisfaction or waiver of certain conditions outlined in the merger agreement. Stakeholders are encouraged to stay informed about any developments as the companies navigate the necessary approvals to finalize the deal.
In conclusion, this merger represents a pivotal moment for both California Resources Corporation and Berry Corporation, promising to reshape the competitive dynamics of the energy sector in California and potentially delivering long-term value for stockholders.