Buffett's Berkshire in Talks to Buy OxyChem for $10 Billion
The potential deal would mark Berkshire Hathaway's largest acquisition since 2022 and aid Occidental's debt reduction strategy.
Warren Buffett's Berkshire Hathaway is in negotiations to acquire Occidental Petroleum's chemical division, OxyChem, in a deal reportedly valued at approximately $10 billion. The move signals Buffett's continued confidence in Occidental's assets and, if completed, would represent , deepening the financial ties between the two companies.
The potential acquisition is the latest chapter in a long-standing relationship. Berkshire Hathaway first made a significant $10 billion investment in Occidental in 2019 to help finance the energy producer's ambitious, and ultimately successful, acquisition of rival Anadarko Petroleum. Since then, Berkshire has steadily increased its position, becoming Occidental's largest shareholder with a stake of approximately 28%.
For Occidental, the sale of its profitable chemical unit is a strategic step to shore up its balance sheet. The company is focused on its core oil and gas operations and is looking to , much of which stems from the Anadarko purchase and the more recent $13 billion acquisition of CrownRock in 2023. A $10 billion cash injection from the sale of OxyChem, which generated nearly $5 billion in revenue over the past year, would significantly accelerate Occidental's goal of lowering its principal debt below its $15 billion target.
This acquisition marks a substantial return to the chemicals sector for Buffett, whose last major foray was the 2011 purchase of Lubrizol. The move is being interpreted as a classic Berkshire investment: acquiring a high-performing, cash-generative business unit that may be considered non-core to its parent but holds significant standalone value. Post-market trading activity for Occidental Petroleum reflected bullish sentiment, as the potential deal validates the underlying worth of the company's diverse assets.