CPPIB To Merge Aera And CRC

Posted on 02/21/2024

Affiliates of Canada Pension Plan Investment Board (CPPIB) have signed a definitive agreement for a proposed merger of Aera Energy, LLC and California Resources Corporation. Aera Energy LLC is a natural gas, oil exploration and production company. California Resources Corporation is an independent energy and carbon management company working toward energy transition. The transaction values Aera Energy at approximately US$ 2.1 billion, inclusive of Aera Energy’s net debt. CPPIB will receive newly issued shares of common stock in the combined company upon the close of the transaction that, at current valuations, is expected to represent approximately 11.2% of the combined company.
California Resources Corporation announced the signing of a definitive merger agreement to combine with Aera Energy in an all-stock transaction.

Bill Rogers, Managing Director, Global Head of Sustainable Energies, CPPIB said: “This transaction provides CPP Investments with an excellent opportunity to scale up our investment in California’s energy transition, with Aera Energy and CRC both aligned in their commitment to enabling new carbon management solutions and each bringing complementary strengths to the table. The combined company is set to play a leading role in California’s energy transition, which we view as a promising source of long-term risk-adjusted returns for the CPP Fund.”

IKAV, which owns a 51% equity interest in Aera Energy, will also become a shareholder of the combined company. CPPIB has held a 49% equity interest in Aera Energy since February 2023.

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