Berkshire Hathaway has announced a major acquisition, signaling a significant move for the company. The conglomerate, led by renowned investor Warren Buffett, plans to acquire OxyChem for $9.7 billion. This transaction marks Buffett’s largest deal in three years.
Berkshire Hathaway’s Upcoming Acquisition
This acquisition comes after Buffett’s last major purchase—in 2022, when he acquired Alleghany for $11.6 billion. At 95 years old, Buffett has recently revealed plans to step down as CEO by the end of this year.
Details of the OxyChem Deal
- Acquisition Amount: $9.7 billion
- Debt Reduction: Approximately $6.5 billion will be allocated to pay down Occidental’s debt, which exceeds $20 billion.
- Closing Date: The deal is expected to be finalized in the fourth quarter of 2023.
OxyChem is a division of Occidental Petroleum and is highly regarded in the chemicals sector. The company produces various essential chemicals used in IV bags, swimming pools, and caustic soda. This latter product is pivotal for industries such as pulp, paper, aluminum production, and battery recycling.
Statements from Leadership
Vicki Hollub, CEO of Occidental, expressed confidence in the acquisition. She stated that OxyChem has flourished under Occidental and assured stakeholders that it will continue to prosper under Berkshire Hathaway’s ownership. This transition comes amid effective operation and high-quality management at OxyChem.
The announcement has had a mild impact on Occidental’s stock, with shares rising slightly under 1% in early trading. This strategic acquisition places Berkshire Hathaway in a strong position within the chemical industry, showcasing its ongoing commitment to growth and investment amid leadership changes.
