Berkshire Hathaway to buy Occidental’s chemical unit for USD9.7b
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The news: Warren Buffet’ts Berkshire Hathaway will buy Occidental Petroleum’s petrochemical business, OxyChem, in Berkshire’s largest deal since 2022.
The numbers: Berkshire will pay USD9.7 billion ($14.68 billion) in cash for OxyChem, and Occidental expects to use USD6.5 billion of the transaction proceeds to reduce debt. It also aims to achieve the target of principal debt below USD15 billion set following the December 2023 announcement of its CrownRock acquisition.
The context: Occidental is most widely known for its oil-and-gas operations, while its OxyChem unit manufactures and sells chemicals used for chlorinating water, recycling batteries and producing paper. The unit generated nearly USD5 billion in sales in the 12 months to June this year.
Occidental has been struggling with a massive debt load following its USD55 billion purchase of Anadarko Petroleum in 2019, which it outbid Chevron to acquire Anadarko’s rich shale oilfields in Texas. It’s USD12 billion CrownRock acquisition pushed the company further into debt, which stoof at USD23.34 billion at the end of June.
The OxyChem sale indicates that Occidental is refocusing on its oil and gas businesses, with accounted for 75% of its total earnings in 2024.
The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals
The source: Berkshire Hathaway
