Berkshire Hathaway Buys Occidental's OxyChem for $9.7 Billion
Berkshire Hathaway, led by Warren Buffett, is acquiring Occidental Petroleum's chemicals division, OxyChem, for $9.7 billion. This move will help Occidental reduce debt and focus on its core oil and gas operations.
Occidental Petroleum, under CEO Vicki Hollub, will save over $350 million annually in interest expenses post-sale. This will bolster its free cash flow, allowing it to invest in low-cost oil and gas resources. The company plans to use $6.5 billion from the sale to repay debt, bringing its principal debt below $15 billion.
OxyChem, with 23 facilities worldwide, produces essential chemicals like caustic soda and PVC. It is consistently profitable and expected to see a significant boost in profits following major investments. Berkshire Hathaway, already owning over $12.6 billion of Occidental's stock, views OxyChem as a valuable addition to its portfolio.
The sale of OxyChem to Berkshire Hathaway will sharpen Occidental Petroleum's focus on oil and gas production, improve its financial flexibility, and reduce its debt. Warren Buffett's confidence in Occidental's management and the value of OxyChem is evident in this $9.7 billion acquisition.
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