BY Fraser Tennant
In a transaction it believes will redefine its chemical portfolio, multinational conglomerate holding company Berkshire Hathaway is to acquire OxyChem, the chemical arm of Occidental Petroleum, for $9.7bn in an all-cash transaction subject to customary purchase price adjustments.
Under the terms of the definitive agreement, Berkshire will acquire all equity interests in OxyChem, with Occidental retaining certain environmental liabilities. The deal is Berkshire’s largest since it acquired Alleghany for $11.6bn in 2022.
“This transaction strengthens our financial position and catalyses 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 at Berkshire Hathaway. “I am incredibly proud of the impressive work the team has done to create this strategic opportunity that will unlock 20-plus years of low-cost resource runway and deliver meaningful near and long-term value.”
Occidental is expected to use $6.5bn from the transaction – a deal that may be Warren Buffett’s last major acquisition as chief executive of Berkshire, with Greg Abel, current vice chairman of non-insurance operations at Berkshire, set to take over – to reduce its debt below $15bn.
“Berkshire is acquiring a robust portfolio of operating assets, supported by an accomplished team,” added Mr Abel. “We look forward to welcoming OxyChem as an operating subsidiary within Berkshire. We commend Vicki and the Occidental team for their commitment to Occidental’s long-term financial stability, as demonstrated by their plan to use proceeds to reinforce the company’s balance sheet.”
An international energy company with assets primarily in the US, the Middle East and North Africa, Occidental is one of the largest oil and gas producers in the US, including a leading producer in the Permian and DJ basins, and offshore Gulf of America. Its chemical subsidiary OxyChem is a global manufacturer of commodity chemicals vital to quality of life, with applications in water treatment, pharmaceuticals, healthcare, and commercial and residential development.
The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals and other customary closing conditions.
Ms Hollub concluded: “OxyChem has grown under Occidental into a well-run, safely operated business with best-in-class employees, and we are confident the business and those employees will continue to thrive under Berkshire Hathaway’s ownership.”
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