Berkshire Hathaway is reportedly in advanced discussions to acquire Occidental Petroleum’s petrochemical division, OxyChem, for an estimated $10 billion. If finalized, this potential transaction would be Berkshire’s most substantial acquisition since its $11.6 billion purchase of Alleghany in 2022. The strategic move highlights the ongoing deployment of Warren Buffett’s conglomerate’s considerable cash reserves and Occidental Petroleum’s concerted efforts to deleverage its balance sheet following significant past acquisitions.
Occidental Petroleum’s Strategic Divestment
Occidental Petroleum has been strategically divesting assets as part of a broader initiative to reduce its substantial debt burden, a consequence of its $55 billion acquisition of Anadarko Petroleum in 2019 and the more recent $12 billion purchase of CrownRock. The company’s financial strategy is focused on shedding liabilities incurred from these large-scale transactions, particularly given its considerable debt of $23.34 billion as of the end of June. OxyChem, a key supplier of chemicals crucial for sectors like healthcare, food safety, and construction, is a significant asset within Occidental’s portfolio.
Financial Implications and Berkshire’s Stake
The potential sale of OxyChem could bring in an estimated $10 billion, aligning with Occidental’s stated financial objectives. For the first two quarters of 2025, OxyChem generated revenues amounting to $2.42 billion. Notably, Berkshire Hathaway is already Occidental Petroleum’s largest shareholder, holding approximately 27% of the Houston-based company’s outstanding shares. This existing stake, accumulated since February 2022, positions Berkshire as a deeply invested party in Occidental’s future performance.
Financing and Leadership Transition
Financial reports indicate that Berkshire Hathaway intends to finance the potential acquisition of OxyChem with cash, rather than through an exchange of Occidental shares. This approach is consistent with Berkshire’s substantial liquidity position, which stood at nearly $350 billion in cash and cash equivalents as of June. This financial maneuver highlights Berkshire’s capacity to pursue large-scale investments from its strong cash position. Warren Buffett, who is slated to conclude his tenure as CEO of Berkshire Hathaway at the close of 2025, continues to oversee significant strategic decisions within the conglomerate.
Jonathan Reed received his MA in Journalism from Columbia University and has reported on corporate governance and leadership for major business magazines. His coverage focuses on executive decision-making, startup innovation, and the evolving role of technology in driving business growth.