Warren Buffett Berkshire Occidental Oxychem
Warren Buffett’s Berkshire Hathaway has recently made headlines with its announcement of a $9.7 billion deal to acquire Occidental Petroleum’s petrochemical unit, OxyChem. This deal marks Berkshire’s largest since 2022 and comes at a time when the conglomerate is sitting on a whopping $344 billion in cash, near a record high for the company.
Shares of Occidental rose 1.4% in premarket trading following the announcement, showcasing investor confidence in the deal. Berkshire already holds a 28.2% stake in Occidental, making it a major investor in the company. Despite this, Buffett, who is 95 years old and stepping down as CEO at the end of the year, has stated that he will not be taking complete control of the Houston-based oil company.
OxyChem, the petrochemical unit being acquired, specializes in manufacturing water treatment, healthcare, and other commercial chemicals. Occidental plans to use $6.5 billion of the proceeds from the deal to pay down debt, a move that CEO Vicki Hollub believes will enable the company to restart buying back stock.
“The problem has been getting our debt down faster, so this resolves the one outstanding issue that I think will now unlock our stock and allow shareholders to feel more comfortable, hopefully, to add to their positions and others to come in,” Hollub said in an interview. She added that this deal is the final step in a major transformation that Occidental began 10 years ago.
This acquisition is not Berkshire’s first foray into the chemical space, with the conglomerate previously acquiring Lubrizol for a similar $10 billion figure in 2011. Greg Abel, Vice Chairman of Non-Insurance Operations at Berkshire and Buffett’s successor as CEO in 2026, expressed excitement about the deal, stating that he looks forward to welcoming OxyChem as an operating subsidiary within Berkshire.
Both companies anticipate the deal closing in the fourth quarter, as reported by The Wall Street Journal earlier this week. This acquisition marks another strategic move by Berkshire Hathaway, further solidifying its position as a major player in the corporate world.
