Berkshire to Buy Occidental’s Chemical Unit for $9.7 Billion

Описание: Matthew Palazola, Bloomberg Intelligence, Senior Analyst, P&C Insurance, breaks down Berkshire Hathaway's decision to buy Occidental Petroleum's petrochemical business for $9.7 billion in cash.

The deal is the latest evidence that Buffett appears back on the hunt after years of refraining from large takeovers and progressively unwinding large holdings like his stake in Apple Inc. 
The transaction is expected to close in the fourth quarter, Berkshire said Thursday in a statement. Shares of Occidental fell as much as 4.6%, while Berkshire’s Class B stock climbed 0.2%.
OxyChem is set to be Berkshire’s largest acquisition since it took over the insurer Alleghany Corp. in 2022 for $13.7 billion, according to data compiled by Bloomberg. Buffett’s cash pile totaled $344 billion at the end of June, close to a record.
Occidental, which is about 27% owned by Berkshire, had already announced almost $4 billion of asset sales since the start of last year as it works to pay down debt in the wake of its $10.8 billion takeover of rival CrownRock LP. The company said it expects to use $6.5 billion of the proceeds from the OxyChem sale to reduce its principal debt to less than $15 billion.
“I believe we are done with the big deals,” Occidental Chief Executive Officer Vicki Hollub said in an interview. “Anything beyond this would be really mostly little transactions within the basins to core up. So I don’t think we’re going to have any more big transactions. This pretty much gets us where we need to be.”
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