California Resources Corporation To Combine With Aera Energy; The Transaction Values Aera At ~$2.1B; CRC Will Issue 21.2M Shares Of Its Common Stock To The Equity Owners Of Aera, And Refinance Aera's Outstanding Debt
Portfolio Pulse from Benzinga Newsdesk
California Resources Corporation (CRC) announced a definitive merger agreement with Aera Energy in an all-stock transaction valued at approximately $2.1 billion. The deal includes issuing 21.2 million CRC shares to Aera's equity owners and refinancing Aera's debt. This merger is expected to be immediately accretive, enhancing key 2024 financial metrics, doubling pro forma 2024E free cash flow to about $685 million, and expanding CRC's carbon management platform. Post-merger, CRC plans to increase shareholder returns, reduce debt, and expand its carbon management business. The transaction, expected to close in the second half of 2024, has received unanimous approval from CRC's Board and Aera's shareholders.
February 07, 2024 | 1:29 pm
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POSITIVE IMPACT
CRC's merger with Aera Energy is expected to significantly enhance its financial metrics by 2024, double its free cash flow, and expand its carbon management platform. The deal also includes a 23% increase in CRC's Share Repurchase Program and a potential increase in its fixed quarterly dividend post-closing.
The merger with Aera Energy is directly related to CRC and is expected to have a positive impact on its financial performance and strategic positioning in the carbon management sector. The immediate accretion to key financial metrics, significant increase in free cash flow, and expansion of the carbon management platform are likely to be viewed positively by investors. The increase in the Share Repurchase Program and potential dividend raise post-merger further underline the expected positive financial impact of this transaction.
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IMPORTANCE 95
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