Buffett's Berkshire to Acquire Occidental's Chemical Arm for $10 Billion
Warren Buffett, the renowned investor, is set to make another significant move in the energy sector. In a deal expected to close in days, Buffett's Berkshire Hathaway will acquire Occidental Petroleum's chemical arm, OxyChem, for a staggering $10 billion. This marks Buffett's largest investment since 2022, when he bought insurer Alleghany for $11.6 billion.
Buffett's interest in OxyChem is not surprising, given his long history with Occidental Petroleum. He initially invested $10 billion in the company in 2019, and its CEO, Vicki Hollub, has worked with him since then. OxyChem, a chemical producer with about $5 billion in annual sales, is seen as a strategic addition to Buffett's portfolio.
The deal also reflects Buffett's confidence in the stock market, or at least certain sectors of it. Occidental's shares jumped about 1 percent on Tuesday following the news of the potential deal. Buffett's designated successor in the energy sector, Greg Abel, is expected to continue expanding Berkshire Hathaway's energy footprint, suggesting a long-term commitment to the sector.
The acquisition of OxyChem by Berkshire Hathaway is a significant development in the energy sector. With a deal value of $10 billion, it underscores Buffett's continued confidence in the sector and his willingness to make big bets. As Buffett's successor, Greg Abel, is expected to carry on this strategy, the energy sector may see more such investments in the future.
