Berkshire Hathaway has struck a $9.7 billion cash deal to acquire Occidental Petroleum’s petrochemical arm, OxyChem, in the conglomerate’s largest purchase in three years. The acquisition expands Warren Buffett’s industrial portfolio as Berkshire sits on a near-record cash pile of $344 billion.
Occidental shares fell more than 7% on Thursday following the announcement, reflecting investor recalibration as the Houston-based company focuses on debt reduction and shareholder returns.
Buffett’s latest move echoes his history of targeting stable, cash-generating businesses. OxyChem produces key materials for water treatment, health care, and other commercial sectors — industries that align with Berkshire’s preference for steady earnings and long-term demand visibility.
Debt Reduction and Strategic Focus
Occidental CEO Vicki Hollub said the sale will enable the company to use $6.5 billion of the proceeds to pay down debt, a move she described as pivotal for restoring investor confidence and restarting share repurchases.
“The problem has been getting our debt down faster, so this resolves the one outstanding issue,” Hollub said Thursday on CNBC’s Squawk Box. “Now we’re going to be able to start our share repurchase program again. This is the last step in our major transformation that we started 10 years ago.”
Berkshire, which already holds a 28.2% stake in Occidental as of June, remains a key strategic partner rather than an outright owner. Buffett, 95, has previously said he has no intention of taking full control of the oil producer.
Greg Abel, Berkshire’s vice chairman of non-insurance operations and Buffett’s designated successor, said OxyChem would become a new operating subsidiary. “We look forward to welcoming OxyChem,” Abel said in a statement, praising Hollub’s “commitment to Occidental’s long-term financial stability.”
The transaction, expected to close in the fourth quarter, follows Berkshire’s 2011 acquisition of Lubrizol for roughly $10 billion — its last major move in the chemicals industry.
What It Means for Investors and Buffett’s Legacy
The OxyChem acquisition comes as Berkshire’s cash reserves near all-time highs, signaling that Buffett continues to favor selective, capital-heavy investments over smaller stock purchases. The timing also aligns with his upcoming retirement as CEO at year-end, passing the reins to Abel in 2026.
For Occidental, the deal strengthens its balance sheet and positions it to resume stock buybacks, potentially lifting investor sentiment. Analysts view the divestiture as a pragmatic way to reduce leverage while maintaining core oil and gas operations.
Buffett’s involvement with Occidental dates back to 2019, when Berkshire provided $10 billion to finance the company’s purchase of Anadarko Petroleum in exchange for preferred shares and warrants. Hollub confirmed that as Occidental’s cash flow grows, it plans to begin redeeming Berkshire’s preferred stock in 2029 — which currently pays an 8% dividend.
As previously covered, Buffett’s investment strategy has leaned toward companies with predictable earnings and disciplined capital management — characteristics OxyChem fits squarely into.
The move underscores Buffett’s enduring influence on corporate dealmaking even as his era at Berkshire approaches its close.
