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https://www.wsj.com/business/deals/berkshire-hatha...

Could not open the link

What’s the reason for selling? Just to pay down debt, or because the chem unit was underperforming?

OXY's reason for selling OxyChem is apparently to pay down debt. Berkshire would be a cash buyer. Still an unconfirmed rumor until its announced but sounds plausible.

I’m hoping the price is an ‘insider deal’

Berkshire Hathaway (BRK.A) (BRK.B) is in talks to buy Occidental Petroleum's (NYSE:OXY) petrochemical business for ~$10 billion, which would make the deal Berkshire's largest since 2022, The Wall Street Journal reported Tuesday.

A deal for the OxyChem petrochem unit, which generated nearly $5 billion in sales in the 12 months ended in June, would be Warren Buffett's second big bet on chemicals, after Berkshire (BRK.A) (BRK.B) acquired specialty chemicals producer Lubrizol for nearly $10 billion including debt in 2011.

The Financial Times reported on Sunday that Occidental (NYSE:OXY) was in talks for a $10 billion deal to sell OxyChem, but did not identify a buyer.

Occidental (OXY) CEO Vicki Hollub traveled to Nebraska in 2019 to visit Buffett, whose company agreed to buy $10 billion of preferred shares in OXY, boosting her effort to outbid Chevron to buy Anadarko Petroleum; the deal saddled the company with debt and attracted criticism, but Buffett doubled down on his bet, eventually buying up ~28% of OXY shares.

Occidental (OXY) has been selling non-core assets to raise cash to pay down debt, repaying $7.5 billion of debt as of August, while Berkshire (BRK.A) (BRK.B) is sitting on a massive cash pile totaling a record $344 billion at the end of June

If true, it’s another one of those “turning liquid into illiquid assets” which they are rather fond of doing. With the usual tax-freeness.

If true, it’s another one of those “turning liquid into illiquid assets” which they are rather fond of doing. With the usual tax-freeness.

I would expect it to be a cash deal but what do I know.

A little bit more from Reuters:

UPDATE 3-Berkshire in talks to buy Occidental's OxyChem for about $10 billion, WSJ reports
19:05:46 PM ET, 09/30/2025 - Reuters
(Adds background in paragraphs 5-15)

Sept 30 (Reuters) - Warren Buffett's Berkshire Hathaway is in talks to buy Occidental Petroleum's OxyChem petrochemical unit for about $10 billion, the Wall Street Journal reported on Tuesday citing people familiar with the matter.

The potential sale of the OxyChem unit, which supplies products used in medical care, food security and construction, would add to a series of divestitures that Occidental has pursued in recent years in a bid to raise cash.

The deal could come together within days, the report added.

Berkshire is Occidental's largest shareholder, owning about 27% of the outstanding shares in the Houston, Texas-based company. The conglomerate began acquiring its stake in the oil and gas producer in February 2022, around the time of the Russian invasion of Ukraine.

If the deal closes, it would mark Berkshire Hathaway's biggest deal since its $11.6 billion purchase of Alleghany in 2022.

Berkshire Hathaway and Occidental Petroleum did not immediately respond to Reuters' requests for comment.

Occidental has grappled with a heavy debt load, a legacy of its $55 billion acquisition of Anadarko Petroleum in 2019, when it outbid rival Chevron to secure shale oilfields in Texas.

Anadarko's nearly a quarter-million acres in the Permian Basin hold oil and gas deposits that can produce output for decades using low-cost drilling techniques.

As well, Occidental's $12 billion acquisition of privately held U.S. shale oil producer CrownRock last year significantly increased the company's debt load, which was $23.34 billion at the end of June.

Berkshire does not plan to pay for OxyChem using Occidental stock, the Financial Times reported separately on Tuesday, citing a person familiar with the matter.

FT had reported over the weekend that Occidental was

seeking at least $10 billion

for OxyChem.

The OxyChem unit generated $2.42 billion in revenue in the first two quarters of 2025.

Berkshire has built up a cash reserve nearing $350 billion as of June. Buffett, 95, is set to step down as chief executive of Berkshire Hathaway at the end of 2025. (Reporting by Katha Kalia and Pooja Menon in Bengaluru; Editing by Tasim Zahid)

I'm not a fan of Buffett buying the OXY chemicals business - IF someone else is willing to buy it. The important thing is to reduce OXY's debt.

The OXY chemical business is a pure commodity business - no moat of substance. Not where I'm hoping BRK's cash goes on a permanent basis. We've already got enough businesses that just grow with the economy.

At a minimum, this should not be a "sweetheart" deal. It's not up to OXY to set the price at $10 billion. Let's see what others are willing to offer. Recessions hurt commodity businesses. What's the rush? Wait until Trump's actions pass through to the economy.

Vickie hasn't done anything to deserve a "good" price.

We paid the US government $76 million in capital gains in exchange for more cash that we don't need. Why now spent part of that on OXY?

Cue Peggy Lee - "Is that all there is?" https://www.youtube.com/watch?v=LCRZZC-DH7M

This is from my online broker’s newsletter.

DJ Berkshire's Potential Deal for Occidental Chemical Business Would Be a Win for Buffett -- Barrons.com


Andrew Bary

Berkshire Hathaway CEO Warren Buffett may be about to score at Occidental Petroleum CEO Vicki Hollub's expense for a second time.

Buffett's Berkshire Hathaway is in talks to buy Occidental's petrochemical business for $10 billion, according to a report Tuesday in The Wall Street Journal. If the deal goes through, Berkshire would be buying an attractive business at what looks like a reasonable price, benefiting because its earnings are currently depressed.

Buffett is price-sensitive in acquisitions and doesn't like to pay up for companies he is buying. If the deal happens, it would be the largest for Berkshire since its nearly $13 billion purchase of the insurer Alleghany in 2022.

Neither company immediately responded to a request for comment.

Occidental's chemical business, like those of other chemical producers like Dow and LyondellBasell Industries, has been hurt this year by weak margins. Dow and Lyondell stocks are down sharply this year, and Dow has slashed its dividend in half.

Occidental has projected that OxyChem would have about $850 million of pretax profits this year, down from $1.1 billion in 2024 and $1.5 billion in 2023.

Buffett may be capitalizing on Occidental CEO Vicki Hollub's desire to reduce Occidental's sizable debt load -- a legacy of the company's largely debt-financed deals for Anadarko Petroleum in 2019 and the private Crown Rock in 2024. Occidental ended the second quarter with about $22 billion in net debt.

The company has paid off $7.5 billion of debt over more than a year from internally generated funds and asset sales. It is aiming to get down to $15 billion of net debt, and selling the chemical business could put it past the finish line.

In 2019, when Hollub needed quick financing to counter the larger Chevron in a bidding war for Anadarko, Berkshire bought $10 billion of attractively priced Occidental preferred stock that paid an 8% dividend yield. Berkshire also got equity warrants as part of that deal.

While Occidental succeeded in buying Anadarko, that preferred stock has weighed on Occidental's results since then, with annual dividend payments now running over $600 million. The amount of preferred outstanding is down to close to $8.5 billion.

In a recent client note, Roth chemicals analyst Leo Mariani raised concerns about a sale of the chemicals business after the Financial Times reported that Occidental was in talks to sell the operation.

He noted that the price of $10 billion worked out to about eight times estimated 2025 earnings before interest, taxes, depreciation and amortization.

"However, 2025 represents trough earnings for its chemicals business and it should grow in the coming years, so this potential sale price doesn't look great from our perspective," Mariani wrote. "The OxyChem business also represented a unique diversification asset that most other E&Ps don't have, so we are not sure that this is an ideal path for the company."

A deal for OxyChem probably would sit well with Berkshire holders. While many Berkshire investors have been eager for the company to invest a chunk of its more than $330 billion in cash, Buffett has found little to buy, either businesses or stocks, in recent years.

Berkshire's Class B stock was down 0.2% in after-hours trading to $501.60 after rising 0.7% in regular trading Tuesday. Occidental shares were up 0.6% to $47.53 after hours after falling 1.8% in regular trading. Energy stocks were weaker because of lower oil prices.

Berkshire holds several investments in Occidental, notably a 27% equity stake in the company accumulated since 2022. That interest is worth about $12 billion. Berkshire also holds $8.5 billion of preferred stock and warrants to buy 84 million shares of common stock at just under $60 a share.

Occidental has long emphasized the benefits of its diversified, integrated business mix -- oil and gas, chemicals, energy pipelines as well as carbon capture and other green-energy businesses -- as a differentiator versus peers.

Some have called Occidental a "mini major" as a result. The biggest energy companies, such as Exxon Mobil and Chevron, also have diversified business mixes including chemicals and refining.

Hollub said earlier this year that the $15 billion debt-reduction target would likely be hit in early 2027. Occidental hasn't been repurchasing stock as it prioritizes debt reduction. That is a contrast with some of its peers.

Weakness in oil prices, which has depressed Occidental's financial results, likely isn't helping the debt reduction process. That might have prompted Occidental to consider a sale of the chemicals businesses.

The company's second-quarter adjusted earnings of 39 cents a share were down from $1.03 a share in the year earlier period.

If a sale does occur to Berkshire, it will be interesting to see if Occidental auctioned the business or simply cut a deal with Buffett.

Berkshire doesn't participate in corporate auctions and generally makes take-it or leave-it offers for businesses, as it did with Alleghany. That deal has been a win for Berkshire in part because it included the valuable Alleghany toy business, which makes the popular Squishmallow dolls.

Buffett's insistence in not participating in corporate auctions is a hindrance to doing deals because corporate boards often feel an obligation to holders to hold an auction to get the best price for their companies or units.

Write to Andrew Bary at andrew.bary@barrons.com

The only thing I hate more than naked links is naked paywalled links.

Throw us a bone. We're not mind readers. At least I'm not.

Well, it’s about 24 hours since the story broke. And no PR from Omaha. In addition to the burden of finding elephants, Buffett has almost always managed to be on top of such news. The world knows after the deal is done. The one way Buffett accomplished this is speed of decision making. If Greg is the one behind the wheel on this OXY Chem thing, this is one more tough bars to overcome. Without speed and secrecy, Berkshire deals aren’t as good.

The only thing I hate more than naked links is naked paywalled links.

Throw us a bone. We're not mind readers. At least I'm not.

Next time I'll skip sharing breaking news here. It didn't occur to me that the Wall Street Journal was some out-there publication for y'all. It was out a few seconds when I posted it.

A rare bit of Berkshire related breaking news. You guys can get back to whatever the hell is discussed on this message board 99% of the time now.

brknut:
“turning liquid into illiquid assets” which they are rather fond of doing. With the usual tax-freeness.

nola:
I would expect it to be a cash deal but what do I know.


I think you are saying the same thing.

But in this case, Berkshire doesn't need the tax shield, given the fact that its OXY position is way underwater anyways. Which would explain why the FT thinks this would be a cash deal: "Berkshire does not plan to pay for OxyChem using Occidental stock, the Financial Times reported separately on Tuesday, citing a person familiar with the matter."

dtb

" A rare bit of Berkshire related breaking news. You guys can get back to whatever the hell is discussed on this message board 99% of the time now."


Tuff crowd nola, enjoy the laughs.

Since Berkshire is notorious for not leaking details of upcoming purchases or deals, the leak of this potential deal almost assuredly had to come from the OXY side.

Does this mean that OXY (Vicky) is looking to pressure Berkshire into agreeing to a better price by making knowledge of the potential sale public? Whatever the reason, publicity of the talks has to bother Buffett (or even Able if he is the one behind this).

I used to hate the secrecy behind Buffett's purchases, but over time I have come to appreciate it. It means the negotiations are much more straightforward.

<<<<Since Berkshire is notorious for not leaking details of upcoming purchases or deals, the leak of this potential deal almost assuredly had to come from the OXY side>>>>

Iconic companies have to keep their secrets. Protecting core competence.

At Berkshire, it’s what they are goin to buy, when, not-done-with-buying etc. With more capital to be allocated in the coming decade than in the cumulative past, this is paramount. It helped that Buffett stuck to paper, including the dinner napkin to communicate deal terms. The sleuths likely go through trash and monitor Netjets traffic.

Wonder if they will nix this just to teach a lesson?

The deal is done, very interesting.

Vickie is being interviewed on cnbc. Brk is down a bit oxy up a bit on the news.

I wouldn't want to upset the independent critical thinkers here so I won't opine but let's see how this plays out today and going forward.

The only thing I hate more than naked links is naked paywalled links.
Throw us a bone. We're not mind readers. At least I'm not.

Next time I'll skip sharing breaking news here. It didn't occur to me that the Wall Street Journal was some out-there publication for y'all. It was out a few seconds when I posted it.

It’s considered rude on any board, and in particular this board, to post naked links. It’s been a thing for years. Just sayin’

One thing occurs to me: when sending someone to a paywall site, if the person has a subscription then they don’t need the link. If the person doesn’t have a subscription then the naked links tells them nothing anyway.

You know, just sayin’.

Post 11635 on this board: “ As a courtesy to others, please don't post naked links without writing a sentence about what one is likely to find at the destination. This isn't twitter, we don't need retweets.
Tnx!
Jim”

Looks like Berkshire will continue to collect those 8% dividends until 2029;-) OXY's SEC presentation on the deal:

https://www.sec.gov/Archives/edgar/data/797468/000...

Have the lawsuits been filed yet? By Monday the latest?


Do any loyal experts still insist brk news doesn't, leak? No front running allowed?

Asking as a new shareholder, who doesn't understand Buffett, thank you.

Looks like Berkshire will continue to collect those 8% dividends until 2029;-) OXY's SEC presentation on the deal:
https://www.sec.gov/Archives/edgar/data/797468/000...

I was a bit surprised at the comment right after that: that they intend to retire [seemingly all] remaining debt at maturity.
It's a rare company that runs with zero gearing.

Jim

You sound like a new shareholder with the Tik Tok and Buffett mention earlier this week . However, we know you as the person posting the same thing day in and day out for over 15 years.

From Bloomberg opinion columnist Liam Deming covering energy

Over the past six years, Occidental Petroleum Corp. has morphed from being a large oil company with a reputation for discipline to an even larger oil company well on its way to becoming a business school case study in the perils of hubris. If Chief Executive Officer Vicki Hollub has been the architect of this transformation, Warren Buffett has been the key enabler. Remarkably, Oxy’s adjusted net income this year is forecast to be lower than in 2018, the year before it bought Anadarko.

it shouldn’t obscure that this is an exercise in repairing damage. Oxy’s acquisitions were supposed to propel it into the big leagues. But the point of getting bigger is to give yourself autonomy, the freedom to deploy capital efficiently and opportunistically. That can hardly be said of selling off your chemicals business in a year when its profit is expected to be the lowest in five years and bellwether rival Dow Inc.’s stock is down 39%. The fact that Berkshire is swooping in says it all, along with the added twist that Buffett helped Oxy dig its own hole.

https://www.bloomberg.com/opinion/articles/2025-10... (Subscription Required)

Occidental Petroleum Corp. is done with monster dealmaking after reaching its asset-sales target with the $9.7 billion chemical-unit sale to Berkshire Hathaway Inc.

“I believe we are done with the big deals,” Occidental Chief Executive Officer Vicki Hollub said in an interview Thursday. “This pretty much gets us where we need to be.”

The company fielded “quite a few” unsolicited offers for OxyChem and had the option of selling it in pieces or as a whole, Hollub said.

“We wanted to go with an offer that was all cash and had certainty to close, and so that’s why we selected Berkshire,” she said. “Now with a debt reduction, we’re where we need to be to ensure that we get more value to the shareholders faster and in a more meaningful way than we’ve been able to do over the last few years.”

https://www.bloomberg.com/news/articles/2025-10-02... (Subscription Required)

FT shoutout for Greg Abel: https://archive.ph/nYJji

”it shouldn’t obscure that this is an exercise in repairing damage. Oxy’s acquisitions were supposed to propel it into the big leagues. But the point of getting bigger is to give yourself autonomy, the freedom to deploy capital efficiently and opportunistically. That can hardly be said of selling off your chemicals business in a year when its profit is expected to be the lowest in five years and bellwether rival Dow Inc.’s stock is down 39%. The fact that Berkshire is swooping in says it all, along with the added twist that Buffett helped Oxy dig its own hole.”

Deming’s view seems shortsighted to me. The other way to look at this as a long-term strategy playing itself out. Similar to Pfizer buying Seagen. Take on a lot of debt to acquire valuable assets for the future, and then work it out so that you’re left with a strong core business and a clear focus. Takes a while. But when it succeeds, the rewards usually justify the risk.

In this case, I remember Charlie describing the 2019 Andarko acquisition as a no-brainer. That was six years ago. This may be the last piece of that deal. It gives BRK a nice asset that Greg knows how to run. OXY gets a fair price and debt relief. The rest of the structure remained undisturbed. I trust Warren and Greg’s judgement that this will be good for BRK shareholders - and Vicky ain’t no slouch either. I still predict she will run BHE someday.

Disclosure: I’m currently long OXY, BRK, and PFE. Each of them still faces challenges of execution, but I like the odds so I’m putting my money where my mouth is. Onward!

abromber

Similar to Pfizer buying Seagen. Take on a lot of debt to acquire valuable assets for the future, and then work it out so that you’re left with a strong core business and a clear focus. Takes a while. But when it succeeds, the rewards usually justify the risk.

Pfizer is the poster child for companies making one disastrous acquisition after another. Stock is at 1998 prices.

Both Kraft and Oxy have not been the Buffet’s best deals. The saving grace of the Oxy investment are the preferred shares. The warrants are very likely to expire worthless. The equity purchases are likely to be in the red for a long time, especially if oil prices go lower in a recession and/or OPEC raises output. Buffett made another error in selling the warrants issued in lieu of dividends in 2020 and then later buying equity at much higher prices.

I'm not a big fan of the OxyChem purchase, either. As you say, "We've already got enough businesses that just grow with the economy." OxyChem also has two disadvantages compared to the leader in the chloralkali business, Dow Chemical. One is scale, which is a big deal in the commodity chemical business, and the other is Dow's patent on the cation exchange membrane used in the electrochemical production cell. Other chloralkali companies have to buy Naphion membranes from DuPont.

I'm also not a big fan of the polyvinyl chloride (PVC) business. Rigid PVC, used for things like water pipe, is brittle and prone to fracture. The PVC water line between the street and my house fractured several years ago, as did the lines of all of my neighbors. Flexible PVC, which is used for such things as food wrap, contains about 40% "plasticizer," which are oils used to make the plastic flexible, and which often are toxic. These oils can leach into fatty foods. My recommendation: use polyethylene, which is cleaner, for food wrap. Anyway, I prefer companies that make good quality products, which PVC is not so much. It is one of the products that gives plastics, which was my field of work for many years, a bad name. (There are some high quality plastics.)

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