Berkshire Hathaway to acquire Occidental’s OxyChem for $9.7 billion

OMAHA/HOUSTON - Berkshire Hathaway Inc. (NYSE:BRK) has agreed to acquire Occidental Petroleum Corporation’s (NYSE:OXY) chemical business, OxyChem, for $9.7 billion in an all-cash transaction, according to a press release statement from both companies. InvestingPro data shows Berkshire maintains robust financial health with strong cash flows and a conservative debt-to-capital ratio of just 5%.

The deal, expected to close in the fourth quarter of 2025, is subject to regulatory approvals and customary closing conditions. Occidental plans to use $6.5 billion of the proceeds to reduce its debt and achieve its target of bringing principal debt below $15 billion, a goal set following its CrownRock acquisition announcement in December 2023. According to InvestingPro, Berkshire’s strong cash position and Altman Z-Score of 9.0 indicate excellent financial stability for such major acquisitions.

"This 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," said Vicki Hollub, President and Chief Executive Officer of Occidental.

Under the agreement, an Occidental subsidiary will retain OxyChem’s legacy environmental liabilities, with Glenn Springs Holdings Inc. continuing to manage existing remedial projects for that subsidiary.

Greg Abel, Vice Chairman of Non-Insurance Operations at Berkshire, stated that the company is "acquiring a robust portfolio of operating assets, supported by an accomplished team."

OxyChem manufactures commodity chemicals used in water treatment, pharmaceuticals, healthcare, and commercial and residential development.

Barclays is serving as financial advisor to Occidental, with Cravath, Swaine & Moore LLP providing legal counsel.

The transaction represents another significant investment by Warren Buffett’s Berkshire Hathaway in Occidental. Berkshire has been gradually increasing its stake in the energy company over recent years, and this acquisition further deepens the relationship between the two companies. With a return on invested capital of 6% and currently trading below its Fair Value according to InvestingPro analysis, Berkshire continues to demonstrate its strategic investment approach.

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