Berkshire Hathaway to pay $9.7 billion for OxyChem, potentially Warren
Buffett's last big deal
[October 03, 2025] By
JOSH FUNK
OMAHA, Neb. (AP) — Berkshire Hathaway is buying Occidental Petroleum's
chemical division for $9.7 billion in what may be the last big
acquisition involving the consummate dealmaker, Warren Buffett.
Buffett wasn’t mentioned anywhere in materials released by Berkshire
Hathaway discussing the deal Thursday, potentially signaling a passing
of the torch to Vice Chair Greg Abel, to whom Buffett will hand the CEO
title in January. But given the relationship that Buffett has with
Occidental CEO Vicki Hollub, who he has praised ever since helping her
with an acquisition back in 2019, and the fact that he likes to be
involved anytime Berkshire spends more than $1 billion dollars, he
certainly had a role.
Even after the transition, Buffett will remain chairman at Berkshire and
will still be involved in deciding how to spend the conglomerate’s
colossal pile of more than $344 billion cash.
Berkshire’s cash reserves have been growing for years because Buffett
has been unable to find any major acquisitions at attractive prices
since completing the $11.6 billion acquisition of Alleghany Insurance in
2022. Prices for big acquisitions have been driven higher in recent
years by the entry of more hedge funds in the market.
What Berkshire is buying
The OxyChem deal is sizeable, but it still uses less than 3% of
Berkshire's cash and likely isn't big enough to make a significant
difference in the conglomerate's bottom line. Investors seemed
underwhelmed with the deal with Berkshire's shares trading down slightly
and Occidental's shares dropping more than 7% Thursday after it was
announced.
OxyChem makes chlorine for water treatment, vinyl chloride for plastics
and calcium chloride that’s used to treat icy roads along with an
assortment of other chemicals. It will fit nicely alongside Lubrizol,
which Buffett bought in 2011 for $9 billion, but Berkshire typically
doesn't consolidate the operations of the companies it buys.
“Berkshire is acquiring a robust portfolio of operating assets,
supported by an accomplished team,” Abel said in a prepared statement.
“We look forward to welcoming OxyChem as an operating subsidiary within
Berkshire."
Preparing for the CEO transition
Edward Jones analyst Jim Shanahan said it makes sense to let Abel take
the lead on this as Berkshire prepares for the transition. But investors
are really watching for what Abel might do differently after he takes
over and what kind of deals he can land on his own.
“It’ll be interesting to see what kind of deals he does, how they’re
similar, how they’re different and how he talks about the
opportunities,” Shanahan said.
It's possible Abel, who is a much more hands-on manager than Buffett,
might do more to get Berkshire companies working together and maybe even
consolidating some things, Shanahan said. But that might be a break with
tradition because Buffett always promised business owners that he just
wanted to buy good businesses and then largely leave them alone other
than requiring them to send their cash to Omaha so he could reinvest it.
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Berkshire Hathaway Chairman and CEO Warren Buffett speaks
during an interview with Liz Claman on Fox Business Network's
"Countdown to the Closing Bell," May 7, 2018, in Omaha, Neb. (AP
Photo/Nati Harnik, File)
 How Occidental will use the cash
OxyChem generated $213 million in pretax earnings for Occidental in
the second quarter, though that is down from last year when it
generated nearly $300 million for the company. This year, Occidental
has been selling off some of its assets in the Permian Basin to
generate $950 million to pay down debt. Since it completed the
CrownRock acquisition in December 2023, Occidental has sold off
roughly $4 billion worth of assets to help it pay down $7.5 billion
in debt. This OxyChem deal will accelerate that.
Occidental expects to use $6.5 billion of proceeds from the
Berkshire deal to lower debt and achieve the target of principal
debt below $15 billion set following the announcement of its
CrownRock acquisition. Occidental will retain all the legacy
environmental liabilities for OxyChem.
Berkshire's massive Occidental stake
Berkshire holds more than 28% of Occidental’s stock and has warrants
to buy another 83,911,942.38 shares in the major oil and gas
producer for $59.586 per share. And Berkshire also has about $8.5
billion worth of preferred Occidental shares that it picked up in
2019 when it helped finance the oil producer’s purchase of Anadarko
that Occidental has been paying 8% dividends on every year.
Buffett had previously told Berkshire investors that he wouldn’t
sell off the Occidental stake and he has been periodically buying
more shares, but he also told shareholders in 2023 that he had no
plans to buy all of Occidental.
Berkshire owns an eclectic assortment of dozens of companies,
including Geico and several other insurers, BNSF railroad, a
portfolio of major utilities and some well-known brands like Dairy
Queen and See’s Candy. Buffett has built up the conglomerate over
the past 60 years. In addition to owning companies outright,
Berkshire holds stocks worth more than $250 billion, including large
stakes in Apple, Coca-Cola, Bank of America and American Express.
The OxyChem deal is expected to close in the fourth quarter of this
year.
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AP Business Writer Michelle Chapman contributed to this report.
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