Buffett Finally Makes His Move: Berkshire Scoops Up OxyChem in $9.7B Deal — Is an Occidental Takeover Next?

Berkshire Hathaway’s long-anticipated move into

Petroleum’s chemical unit became official on Thursday, as Warren Buffett’s conglomerate announced a $9.7 billion all-cash deal to acquire OxyChem. The transaction, set to close in the fourth quarter of 2025, marks Berkshire’s largest purchase since it acquired Alleghany in 2022. For the market, the news lands with : both the Financial Times and the Wall Street Journal had reported in recent days that a transaction was near, and speculation has circulated for years that Buffett might eventually expand his Occidental stake into a full-scale acquisition.

The deal at a glance

, Occidental will sell OxyChem to Berkshire Hathaway for $9.7 billion in cash, subject to customary adjustments. An Occidental subsidiary will retain the unit’s legacy environmental liabilities, while Berkshire will acquire the core portfolio of assets and employees. OxyChem is a global leader in commodity chemicals, providing chlorine, caustic soda, vinyl, and other products used in water treatment, healthcare, pharmaceuticals, and construction. With nearly $5 billion in annual sales, it adds to Berkshire’s roster of industrial subsidiaries, joining names like Lubrizol, Precision Castparts, and BNSF.

Occidental plans to use $6.5 billion of the proceeds to pay down debt, bringing its total principal below $15 billion—a target set after its 2023 CrownRock acquisition. The company has carried a heavy debt burden since its $38 billion purchase of Anadarko Petroleum in 2019, a deal in which Buffett was instrumental, providing $10 billion in financing at the time. While the Anadarko purchase helped transform Occidental into a dominant Permian producer, it also left a legacy of leverage that has weighed on investor confidence.

Why Occidental is selling

For

, the sale reflects a pragmatic move to streamline operations and repair its balance sheet. CEO Vicki Hollub emphasized that the transaction “strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the last decade.” In other words, Occidental is doubling down on its core upstream assets while shedding a cyclical chemical business that, while profitable, is facing trough margins.

Indeed, OxyChem is expected to generate about $850 million in pretax profits this year, down from $1.1 billion in 2024 and $1.5 billion in 2023. Weak global chemical markets, particularly in vinyls and chlor-alkali, have pressured profitability across the sector, with peers like Dow and LyondellBasell also struggling. For Berkshire, acquiring OxyChem at a moment of depressed earnings provides an opportunity to buy low, consistent with Buffett’s price-sensitive approach.

The Buffett connection

The acquisition further cements Buffett’s deepening ties with Occidental. Berkshire already owns nearly 28% of OXY’s equity, alongside preferred shares carrying an 8% dividend yield, giving Buffett both a financial and strategic foothold in the Houston-based energy producer. For years, analysts and investors have speculated that Buffett might eventually buy Occidental outright, particularly as his preference for energy and infrastructure assets has grown. Thursday’s announcement may not be that endgame, but it underscores Berkshire’s long-term confidence in the company and its management.

The purchase also echoes Berkshire’s 2011 acquisition of specialty chemical maker Lubrizol for nearly $10 billion. Like Lubrizol, OxyChem provides essential industrial products with broad end-market demand and a durable competitive position. For Greg Abel, Buffett’s heir apparent and Vice Chairman of Non-Insurance Operations, adding OxyChem aligns with his background in energy and industrials, potentially shaping Berkshire’s portfolio for the post-Buffett era.

Market reaction and technical setup

Shares of Occidental gained 1.9% to $48.64 in premarket trading on the news, while Berkshire’s Class B shares slipped 0.3% to $496.90. From a technical perspective, OXY’s stock has been setting up favorably. The shares are pushing higher through key moving averages in what technicians would recognize as an ascending triangle formation. A decisive breakout above the $50 level could set the stage for a year-end rally, particularly if debt-reduction progress restores confidence among institutional investors. With energy equities already benefiting from resilient crude prices and shareholder-friendly capital return programs, OXY may be poised to re-rate higher.

Investor sentiment and outlook

That optimism, however, is balanced by ongoing caution. The latest

shows bullishness above 40% for three straight weeks but still far from euphoric highs, while bearish sentiment remains elevated at over 39%. Investors, in other words, are willing to embrace stories like OXY’s restructuring but remain wary of macro headwinds, including interest rates, political gridlock, and global demand.

Still, for Occidental, the OxyChem sale offers a clear path forward. By accelerating debt reduction and focusing on its core oil and gas business, the company removes a persistent overhang and enhances its financial flexibility. For Berkshire, it adds a stable, cash-generating industrial asset at a reasonable valuation, while keeping the door open to deeper involvement with Occidental down the line.

The deal may not be the full-scale OXY acquisition long rumored in markets, but it is another example of Buffett’s disciplined, opportunistic style—backing management teams in need of support while securing assets with long-term value. Investors will be watching closely as the transaction moves toward closing, and as Occidental works to prove that its streamlined portfolio can deliver sustainable returns.