Berkshire to buy occidental’s chemical unit for $9.7B

Logo of Warren Buffett’s Berkshire Hathaway Inc.

Warren Buffett’s Berkshire Hathaway Inc. reached a deal to buy Occidental Petroleum Corp.’s petrochemical business for about $9.7 billion in cash.

If the deal closes, it would be the biggest purchase for Berkshire since its $11.6 billion buyout of insurance firm Alleghany Corporation in 2022 and expand its chemical portfolio beyond Lubrizol.

The latest move marks billionaire Buffett's return to the search for good deals after years of abstaining from major acquisitions. The company's massive cash and Treasury securities holdings, which stood at $344 billion as of June, helped him make the latest move.

The OxyChem deal is Buffett's second-largest bet in the chemicals sector, following his $10 billion acquisition of specialty chemicals maker Lubrizol in 2011, including debt.

Occidental is best known for its oil and gas operations, and Berkshire is already its largest shareholder. However, its petrochemical division specializes in the sale of chemicals used in battery recycling, paper production, and other industries. The division alone generated nearly $5 billion in sales in the twelve months ending in June.