The transaction was structured as an all-stock merger, with Berry shareholders receiving a fixed exchange ratio of 0.0718 shares of CRC common stock for each Berry share, representing a 15% premium based on the companies' closing stock prices on September 12, 2025 (the last trading day before announcement). At announcement, the exchange ratio implied a per-share value of approximately $3.81 for Berry stock and valued Berry at approximately $717 million inclusive of its net debt, with the companies stating the deal implied an enterprise value for the combined entity of more than $6 billion. CRC disclosed the transaction was priced at approximately 2.9 times enterprise value to Berry's estimated 2025 adjusted EBITDAX. Existing CRC shareholders were expected to own approximately 94% of the combined company upon closing. At closing, CRC issued approximately 5.6 million shares of its common stock to former Berry equity holders, with an aggregate value of approximately $253 million based on CRC's closing share price on December 17, 2025, reflecting the decline in CRC's stock price between signing and closing.
CRC president and CEO Francisco Leon said the deal would create "a stronger, more efficient California energy leader" that is "attractively valued and immediately accretive across key financial metrics," adding that by "realizing substantial corporate and operating synergies, we expect to significantly lower costs and generate higher free cash flow." Berry board chair Renee Hornbaker said the transaction "presents a compelling value proposition for our shareholders," citing the "industrial logic of this merger" and noting that "the strong tailwinds we are seeing on the regulatory front" made it the right time to consummate the deal. On a pro forma basis, CRC said the combined company would have produced approximately 161 thousand barrels of oil equivalent per day (81% oil) in the second quarter of 2025 and held approximately 652 million barrels of oil equivalent of proved reserves (87% proved developed) as of year-end 2024. CRC also highlighted that Berry's roughly 100,000 net acre Uinta Basin position in Utah would provide additional operational and financial optionality, noting a PV-10 of total proved reserves there of approximately $110 million as of year-end 2024.
CRC expects to achieve annual cost synergies of $80 million to $90 million within 12 months of closing, equal to approximately 12% of the transaction value, with approximately 50% of run-rate synergies implemented within six months of closing and the remaining 50% within 12 months. Synergies are expected to come primarily from corporate cost reductions, lower interest costs from debt refinancing, operating improvements and supply chain efficiencies. CRC projected the deal would be accretive to net cash provided by operating activities and free cash flow, with projected second-half 2025 per-share accretion to both metrics of more than 10% before estimated synergies. Post-closing, CRC said it would retain an estimated pro forma trailing-twelve-month leverage ratio of less than 1.0x and approximately 70% of its expected second-half 2025 pro forma oil production hedged at a $68 per barrel Brent floor price. CRC also stated it planned to refinance Berry's outstanding debt using cash on hand and borrowings under its credit agreement, and the merger's pro forma financial statements reflect the issuance of approximately $400 million in new notes, with proceeds earmarked in part to repay Berry's existing indebtedness in connection with the merger.
The S-4 registration statement filed by CRC on October 14, 2025 (which included Berry's proxy statement/prospectus and was later mailed as the DEFM14A dated November 4, 2025) disclosed an extensive background of the merger. Berry had run two prior sale-focused strategic alternatives processes, in 2021-2022 (with Financial Advisor A, which contacted roughly 30 potential counterparties) and beginning in 2022 (with Guggenheim Securities, which contacted roughly 30 additional potential counterparties not previously contacted, along with some re-contacted from the first process), including CRC in both processes, without producing an agreed transaction, with several parties citing California's regulatory and political environment and valuation disconnects. Berry separately held substantive, extended negotiations with two other named bidders, referred to as "Party A" (a publicly traded oil and gas company that proposed an at-market stock-for-stock merger in February 2024 before terminating talks in August 2024 over California regulatory risk and refinancing concerns) and "Party C" (a publicly traded independent oil and gas company that proposed an all-stock combination in September 2024 giving Berry shareholders 20% of the combined company, before pausing and ultimately discontinuing discussions in early 2025 after revising Berry's valuation downward). A third party, "Party B," proposed in March 2025 to contribute a privately held oil and gas portfolio company to Berry in exchange for Berry stock, which would have given Berry shareholders only 31% of the combined, Party B-controlled company. CRC's CEO Francisco Leon first contacted Berry's CEO Fernando Araujo about a potential combination in November 2024, and the companies executed a mutual confidentiality agreement in January 2025 before negotiating the final agreement, which the Berry board unanimously approved on September 13-14, 2025 after receiving a fairness opinion from Guggenheim Securities regarding the exchange ratio.
On the legal advisory side, Sullivan & Cromwell LLP served as legal advisor to CRC, and Vinson & Elkins LLP served as legal advisor to Berry, both per the joint announcement press release. On the financial advisory side, RBC Capital Markets and Petrie Partners served as financial advisors to CRC, while Guggenheim Securities, LLC served as financial advisor to Berry and rendered a fairness opinion on the exchange ratio to Berry's board. Innisfree M&A Incorporated, as previously identified, served as Berry's proxy solicitor in connection with the shareholder vote, maintaining offices at 501 Madison Avenue, 20th Floor in New York.
The merger agreement included a termination fee of $12,044,370 payable by Berry to CRC under specified circumstances, including a change in the Berry board's recommendation or Berry's entry into a competing acquisition agreement within nine months of certain terminations. CRC's aggregate monetary liability upon termination was capped at $45,255,219 (absent fraud), and the agreement also provided for expense reimbursement payments of up to $5 million in certain termination scenarios. Closing was conditioned on, among other things, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and receipt of approval under Section 203 of the Federal Power Act from the Federal Energy Regulatory Commission, as well as Berry stockholder approval and receipt of a tax opinion from Vinson & Elkins. CRC and Berry filed their joint FERC Section 203 application on October 1, 2025, and made their HSR filings with the FTC and DOJ on October 10, 2025. Berry stockholders approved the merger agreement at a December 15, 2025 special meeting, with 56,199,678 shares voting for the merger proposal against 1,153,772 against and 204,975 abstaining, out of 57,558,425 shares represented at the meeting (77,607,094 shares were outstanding and entitled to vote as of the October 30, 2025 record date). The merger closed three days later, on December 18, 2025, with Berry surviving as a direct, wholly-owned subsidiary of CRC and the combined company headquartered in Long Beach, California under CRC's existing executive management team.