Berkshire Hathaway to Acquire Occidental's OxyChem for $10 Billion
Berkshire Hathaway, led by legendary investor Warren Buffett, is set to acquire Occidental Petroleum Corp's petrochemical business, OxyChem, for around $10 billion. This move comes as Buffett steps down as CEO in 2026, with Greg Abel, the current vice chairman, taking the helm. The acquisition is Berkshire's second significant foray into chemicals, following its 2011 purchase of Lubrizol for nearly $10 billion.
Buffett's interest in Occidental began in 2019 when he started buying the company's stock after listening to an earnings conference call. He further increased his investment during the COVID-19 pandemic, obtaining shares at a discount. The acquisition of OxyChem, expected to generate pretax income of $800 million to $900 million in 2025, will be led by Greg Abel, who is also Buffett's designated successor as CEO starting in 2026.
Occidental has also announced the sale of its gas pipeline and other infrastructure to Enterprise Products Partners. This deal comes amidst a 15% fall in U.S. oil prices this year, with major oil companies like ConocoPhilips and Chevron announcing mass layoffs.
The acquisition of OxyChem by Berkshire Hathaway is a strategic move that expands the conglomerate's presence in the chemicals industry. With Abel at the helm, the company looks set to continue its growth trajectory under Buffett's chairmanship.
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