Bakersfield oil producer Aera Energy, LLC is being acquired by a Long Beach company.
California Resources Corporation announced Wednesday that it is merging with Aera Energy in an all-stock transaction valued at $2.1 billion.
The big picture: Per the deal, Aera Energy’s owners will receive 21.2 million shares of California Resources Corporation’s common stock. That equals around 22.9 percent of the company’s fully diluted shares.
- California Resources Corporation has secured a firm commitment for a $500 million bridge loan to facilitate closing.
- The merged company is valued around $5.6 billion.
- California Resources Corporation will run the merged company.
The backstory: The new deal comes shortly after Aera Energy was sold off by its joint owners, Royal Dutch Shell Plc and Exxon Mobil Corp.
- Those companies sold Aera Energy to a Canadian pension fund and a German asset management company last year for $4 billion.
What they’re saying: “Aera and CRC are two great companies with decades of experience and track records that will serve as a foundation for a strong combination,” said Erik Bartsch, Aera Energy’s President and CEO. “We are committed to continuing to deliver the energy Californians need today and working to deploy carbon capture at-scale.”
- California Resources Corporation President and CEO Francisco Leon said the acquisition will generate scale in the company’s operations and expand its energy transition platform.
- “Together, this combination will create an unquestioned leader in energy transition, producing low carbon intensity fuels that California needs while accelerating the decarbonization of the state’s industrial and energy industries,” Leon said.