Berkshire Hathaway is negotiating the acquisition of the petrochemicals business of Occidental Petroleum in a deal that could fetch $10 billion for the oil major, the Wall Street Journal has reported, citing unnamed people familiar with the talks.
According to these people, the deal could close in a few days, with WSJ noting that if closed, the deal would be Berkshire Hathaway’s largest acquisition since 2022, when it paid $11.6 billion for insurance company Alleghany. Warren Buffett’s investment company is already the largest shareholder in Occidental and has been building its stake in the company for years. At one point, this sparked speculation about plans for a takeover of the oil major, but no such move was made.
OxyChem, the Wall Street Journal notes, specializes in chemicals used in things like battery recycling, water chlorination, and paper production. The company also produces PVC resin used in water supply pipes and medical supplies, per its website. It booked revenues of some $5 billion for the 12 months to June. If the deal is finalized, it would become one of the largest standalone petrochemical producers in the world.
The Financial Times first reported on a possible sale, writing over the weekend that Occidental was considering a divestment of OxyChem, without mentioning a buyer. Oxy has been divesting various assets for years, after it got deeply into debt to acquire Anadarko. The price tag of that deal was $55 billion. Occidental’s debt burden to date is about $24 billion, down from $48.75 billion in September 2019, right after the Anadarko acquisition. Debt then jumped again in 2023, when Oxy acquired CrownRock for $12 billion.
Occidental was earlier this year named among the top 10 shale operators, with 1.22 million barrels of oil equivalent in daily production. This placed it third after Exxon and sector independent Expand Energy.
By Irina Slav for Oilprice.com
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