Berkshire Hathaway's $9.7B OxyChem Deal: Buffett's Biggest Acquisition Since 2022
Warren Buffett's Berkshire Hathaway has agreed to acquire Occidental Petroleum's petrochemical division, OxyChem, for $9.7 billion. This marks the largest acquisition by Berkshire Hathaway since 2022 and comes as Buffett prepares to step down as CEO later this year.
OxyChem produces chemicals used in water treatment, healthcare, and other commercial applications. Despite the acquisition, Berkshire Hathaway's shares have dipped by 0.3%, though they have gained around 10% since the start of the year. Occidental Petroleum's stock, however, is up around 1% in pre-market trading following the announcement.
Buffett's company has been a major shareholder of Occidental Petroleum since 2019, holding around 28% by the end of June 2023. With this acquisition, Berkshire Hathaway strengthens its strategic stake in Occidental. Occidental Petroleum will use $6.5 billion of the proceeds to reduce its debt and resume share buybacks.
The acquisition of OxyChem by Berkshire Hathaway is a significant move for both companies. For Berkshire Hathaway, it's the largest deal since 2022 and a notable investment before Buffett's departure as CEO. For Occidental Petroleum, it provides a substantial sum to reduce debt and resume share buybacks, potentially improving its financial health.
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