Warren Buffett’s sprawling conglomerate could unveil its largest deal in years in coming days.
Warren Buffett’s Berkshire Hathaway is in talks to buy Occidental’s petrochemical business for around $10 billion, according to people familiar with the matter. The deal, which would be Berkshire’s largest since 2022, could come together within days, the people said.
Houston-based Occidental is largely known for its oil-and-gas operations. The company has a market value of around $46 billion and already counts Berkshire as its largest shareholder.
Occidental’s petrochemical division, OxyChem, manufactures and sells chemicals for use in applications including chlorinating water, recycling batteries and producing paper. The unit generated nearly $5 billion in sales in the 12 months ended in June.
Assuming talks don’t fall apart, the OxyChem deal would be Buffett’s second big bet on chemicals. In 2011, Berkshire acquired specialty-chemicals producer, Lubrizol, for close to $10 billion, including debt.
The Financial Times reported on Sunday that Occidental was in talks for a $10 billion deal to sell OxyChem, without identifying the buyer.
The last major deal Berkshire did was in 2022, when it agreed to pay $11.6 billion to buy insurer Alleghany.
Buffett, 95, got involved with Occidental in 2019, as Chief Executive Vicki Hollub was trying to outbid Chevron to buy Anadarko Petroleum. In a trip facilitated by Bank of America Chief Brian Moynihan, Hollub traveled to Nebraska to visit Buffett, whose company agreed to buy $10 billion of preferred shares in Occidental to bolster her $38 billion offer.
Occidental’s fortunes have waxed and waned since then. The deal saddled the company with debt and attracted criticism from activist investor Carl Icahn. Buffett doubled down as Icahn exited, eventually buying up roughly 28% of its shares. The company’s shares more recently have come under pressure with oil prices lower.
Occidental has been selling noncore assets to raise cash to pay down debt. As of August, it said it had repaid $7.5 billion of debt.
Berkshire, on the other hand, has been sitting on a massive cash pile. The company’s cash and Treasury bills sat at a record $344 billion at the end of June, raising investors’ eyebrows.
Buffett has said the company still prefers owning businesses, though he has suggested that finding the right ones to buy can be hard.
“Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned,” Buffett wrote earlier this year.
The famed investor plans to retire from his role as CEO at the end of the year and hand the reins to Greg Abel. Buffett will remain chairman.