Berkshire Hathaway has struck a $9.7 billion cash deal to acquire Occidental Petroleum’s petrochemical division, OxyChem. This marks the conglomerate’s largest acquisition since 2022, when it bought insurer Alleghany for $11.6 billion. The move also comes as Berkshire sits on a near record cash reserve of $344 billion, giving Warren Buffett the firepower for such bold bets even as he prepares to step down as CEO at the end of the year.
Why This Deal Matters
OxyChem is a major manufacturer of chemicals used in water treatment, health care, and commercial industries. The purchase adds a strong operating business to Berkshire’s portfolio and reflects Buffett’s long-standing interest in stable, cash-generating companies. Berkshire already owns a 28.2 percent stake in Occidental, but Buffett has been clear he does not intend to take full control of the Houston-based oil giant.
Occidental’s Debt Reduction Plan
For Occidental, the transaction represents an opportunity to reduce its heavy debt load. CEO Vicki Hollub confirmed that $6.5 billion from the deal proceeds will be directed toward debt repayment. She added that with leverage concerns eased, the company is now ready to resume its share buyback program. This, she believes, will restore confidence among existing shareholders and attract fresh interest from the market. Hollub described the sale as the final step in a decade-long transformation of the company’s balance sheet.
Berkshire’s Chemical Play
This is not Buffett’s first major bet in the chemical sector. In 2011, Berkshire acquired Lubrizol for around $10 billion, a deal of similar scale. Greg Abel, Berkshire’s vice chairman of non-insurance operations and Buffett’s successor as CEO in 2026, praised Occidental’s strategy, calling it a commitment to long-term financial stability. He confirmed OxyChem would become a fully integrated operating subsidiary within Berkshire once the deal closes in the fourth quarter of 2025.
A Deeper Berkshire-Occidental Relationship
Buffett’s ties to Occidental go back to 2019 when he provided $10 billion in financing for Occidental’s takeover of Anadarko Petroleum. That deal gave Berkshire preferred shares carrying an 8 percent dividend along with warrants to buy Occidental’s common stock. Hollub also indicated that starting in 2029, the company intends to begin redeeming Berkshire’s preferred shares as its cash flows strengthen.
The OxyChem deal signals Buffett’s enduring confidence in sectors with essential demand and steady cash generation, even as he prepares to hand the reins of Berkshire to Greg Abel. For Occidental, it is a chance to unlock shareholder value and move past its debt burden while preparing for a new phase of growth.
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