Berkshire Hathaway, Inc. (NYSE:BRK) (NYSE:BRK) is in talks to acquire Occidental Petroleum Corp.‘s (NYSE:OXY) chemical unit, OxyChem, in a deal valued at roughly $10 billion.
If finalized, it would be Berkshire's biggest purchase since 2022 and could be completed soon, according to the Wall Street Journal.
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The Details:
Occidental, based in Houston, is primarily known for oil and gas, with a market capitalization of about $46 billion.
OxyChem makes products used in disinfecting water, battery recycling, and paper production, bringing in nearly $5 billion in revenue in the year ending June.
Berkshire is already Occidental's largest shareholder.
Should the negotiations succeed, the deal would mark Buffett's second major investment in chemicals; Berkshire bought Lubrizol in 2011 for almost $10 billion.
The Financial Times first reported Occidental's effort to sell OxyChem, though it did not identify the buyer.
The Background:
Berkshire's last major deal was the $11.6 billion acquisition of Alleghany in 2022.
Buffett began building ties with Occidental in 2019 when CEO Vicki Hollub sought his backing to outmaneuver Chevron Corp. (NYSE:CVX) in a bid for Anadarko Petroleum.
Berkshire provided $10 billion for preferred shares, helping finance Occidental's $38 billion takeover. While the move left Occidental with heavy debt and spurred criticism from Carl Icahn, Buffett increased his stake as Icahn exited, eventually buying around 28% of the company.
Occidental has recently been selling assets to reduce debt, repaying $7.5 billion by August. Meanwhile, Berkshire is holding record cash reserves of about $344 billion as of June.
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