Omaha, Neb. (AP) – Warren Buffett announced his biggest deal in years with Berkshire Hathaways $ 9.7 billion takeover of …
Omaha, Neb. (AP) – Warren Buffett announced his biggest deal in years with Berkshire Hathaway’s $ 9.7 billion takeover of the Chemical Division of Occidental Petroleum.
The deal for Oxychem can be Buffett’s last problem before he Hands about the CEO title Unpleasant Vice -chairman Greg Abel In January. Buffett is planning to Stay chairman in Berkshire and will still be involved in deciding how the conglomerate can more than publish $ 344 billion cash.
Berkshire’s money stack has been growing steadily for years because Buffett has not been able to find large acquisitions at attractive prices since then completing the acquisition of $ 11.6 billion from Alleghany Insurance in 2022. Prices for large acquisitions have been higher in recent years by the accession of more hedge funds in the market.
Oxych Makes things like chlorine for water treatment, vinyl chloride for plastics and calcium chloride that is used to treat icy roads, along with a range of other chemicals. It fits nicely in Berkshire next to Lubizol, Die Buffett Bought in 2011 For $ 9 billion. But Berkshire generally does not consolidate his subsidiaries, so Oxychem will probably continue to work independently.
Oxychem generated $ 213 million in profit for Occidental in the second quarter, although that is lower than last year when it generated nearly $ 300 million for the company. This year, Occidental has sold some of its assets in the Perm -Basin to generate $ 950 million to pay debts. Because it completed the Crownrock acquisition in December 2023, Occidental sold around $ 4 billion in assets to help pay $ 7.5 billion in debts. This Oxychem deal will accelerate that.
Occidental expects $ 6.5 billion in revenues from the Berkshire deal to use the debts and to reach the target of the main debt under the $ 15 billion that was determined after the announcement of the Crownrock acquisition.
Berkshire kept more than 28% of the shares of Occidental And Warrants had to buy another 83,911,942.38 shares in the large oil and gas producer for $ 59.586 per share for this deal. And Berkshire had around $ 8.5 billion in preferred facilities that it picked up in 2019 when it helped to finance anadarko by fining the oil producer that Occidental has paid 8% dividends each year.
Buffett had previously told Berkshire investors that he would not sell the Western interest and he has bought more shares periodically, but he also told the shareholders in 2023 that he had No plans to buy All occidental.
Berkshire has an eclectic range of dozens of companies, including Geico and various other insurers, BNSF Railroad, a portfolio of large utility companies and some well -known brands such as Dairy Queen and See’s Candy. Buffett has built up the conglomerate in the last 60 years. In addition to owning companies, Berkshire has shares with a value of more than $ 250 billion, including major interests in Apple, Coca-Cola, Bank of American and American Express.
The Oxychem deal is expected to close in the fourth quarter of this year.
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AP company writer Michelle Chapman has contributed to this report.
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