Warren Buffett’s Berkshire Hathaway agreed to buy Occidental Petroleum’s chemicals business OxyChem for $9.7 billion, the conglomerate’s largest purchase in three years.
It could also be Buffett’s swan song. The 95-year-old investing icon is stepping down as CEO of Berkshire at the end of this year, before handing over the reins to Greg Abel (who was the real mastermind behind this deal). Buffett will stay on as chairman.
Big picture: Berkshire’s cash pile has grown to $344 billion as Buffett and his lieutenants said they couldn’t find any acquisition targets at reasonable prices. The last time Buffett struck a major deal was in 2022, when Berkshire paid $11.6 billion for the insurer Alleghany. And Buffett hasn’t made a play in the chemicals space since he bought Lubrizol for $10 billion in 2011.
So after waiting so long to strike a deal, why OxyChem? For one, Buffett knows this business and has a financial interest in seeing Occidental succeed. Berkshire owns 28% of Occidental stemming from an investment in 2019 to help finance its acquisition of Anadarko Petroleum. OxyChem is also one of those unsexy but perhaps undervalued businesses that Buffett has hung his hat on all these years: It makes chemicals for uses like chlorinating water, treating icy roads, recycling batteries, and making paper.
The deal presents a much-needed windfall for Occidental, which loaded up on debt from that Anadarko purchase and is facing headwinds from lower oil prices and stagnating production in the Permian Basin. It plans to use $6.5 billion of the proceeds from the Berkshire deal to lower its principal debt to under $15 billion.
Occidental stock fell more than 7% on the day, while Berkshire Hathaway shares were flat. Berkshire shares are up 10% this year, underperforming the S&P 500, while Occidental stock has fallen more than 11% in 2025.—NF
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