Posted: Feb 21, 2013 5:52 AM
Updated: Feb 21, 2013 5:54 AM
HOUSTON (AP) Linn Energy is buying the drilling company Berry Petroleum Co. for stock worth about $2.5 billion.
Linn, an oil and gas producer, says the deal announced Thursday will broaden its presence in California, Texas and the Rockies and boost its production.
As part of the transaction, a Linn affiliate will issue 1.25 shares for each outstanding Berry share. That values Denver-based Berry's stock at almost $46.24 per share, a 19.8 percent premium to Berry's closing price on Wednesday.
The companies value the deal at $4.3 billion including assumed debt.
The combined company will be based in Houston.
The companies' boards unanimously approved the deal. It still needs approval from the companies' shareholders. The acquisition is expected to close by June 30.
Berry's stock jumped more than 8 percent in premarket trading.