Berkshire Hathaway in talks to acquire OxyChem for $10 billion

Berkshire Hathaway is reportedly in talks to acquire Occidental Petroleum's petrochemical business for around $10 billion. The deal could be finalized within days and would be Berkshire's largest transaction since 2022. Occidental has been selling assets to pay down debt after its $10.8 billion acquisition of CrownRock LP last year.

Berkshire Hathaway is reportedly in advanced negotiations to acquire Occidental Petroleum's petrochemical business for approximately $10 billion Berkshire Hathaway Near $10 Billion Deal for Occidental’s Petrochemical Unit^[1]. The deal, which would be Berkshire's largest acquisition since 2022, could be finalized within days. The petrochemical division, OxyChem, manufactures and sells chemicals for various applications, including chlorinating water, recycling batteries, and producing paper. OxyChem generated nearly $5 billion in sales in the 12 months ended in June.

Occidental Petroleum, based in Houston, is known primarily for its oil-and-gas operations but has been under financial strain following its $10.8 billion acquisition of CrownRock LP last year. The company has been selling noncore assets to raise cash to pay down debt, having repaid $7.5 billion as of August Berkshire Hathaway Near $10 Billion Deal for Occidental’s Petrochemical Unit^[1].

Berkshire Hathaway, under the leadership of Warren Buffett, has been sitting on a massive cash pile. As of the end of June, Berkshire’s cash and Treasury bills totaled a record $344 billion, indicating a strong financial position to make such a large acquisition Berkshire Hathaway Near $10 Billion Deal for Occidental’s Petrochemical Unit^[1].

This deal would be Buffett’s second significant investment in the chemicals sector. In 2011, Berkshire acquired specialty-chemicals producer Lubrizol for nearly $10 billion, including debt Berkshire Hathaway Near $10 Billion Deal for Occidental’s Petrochemical Unit^[1]. Buffett, who is set to retire as CEO at the end of the year and hand over the reins to Greg Abel, has consistently stated that Berkshire prefers owning businesses over cash-equivalent assets Berkshire Hathaway Near $10 Billion Deal for Occidental’s Petrochemical Unit^[1].

The acquisition of OxyChem would further expand Berkshire’s portfolio and diversify its revenue streams. However, it remains to be seen how the integration will impact Occidental's overall financial health and Berkshire's future investment strategy.