Last updated on Thursday, 02/10/2025 at 05:20 PM IST
Warren Buffett’s Berkshire Hathaway has officially announced the Berkshire Hathaway OxyChem acquisition for $9.7 billion in an all-cash transaction today. The petrochemical division sale represents Occidental Petroleum’s largest divestment and marks Buffett’s biggest deal since acquiring Alleghany Corporation for $11.6 billion in 2022.
The chemical company buyout is expected to close in the fourth quarter of 2025, pending regulatory approvals. This cash transaction will significantly reshape both companies’ strategic focus as the energy sector divestment accelerates.
Key Deal Facts
- Purchase Price: $9.7 billion all-cash deal
- Target Company: OxyChem petrochemical division
- Annual Revenue: Approximately $5 billion
- Closing Timeline: Q4 2025
- Debt Reduction: $6.5 billion allocated to Occidental’s debt paydown
- Strategic Focus: Berkshire enters standalone petrochemicals market
Table of Contents
What This Warren Buffett Deal Means
The Berkshire Hathaway OxyChem acquisition creates one of the world’s largest independent petrochemical companies. OxyChem specializes in manufacturing essential chemicals for water treatment, healthcare applications, swimming pool treatment, and vinyl products used in medical devices.
Occidental Petroleum will allocate $6.5 billion from the cash transaction toward debt reduction. The company carries substantial debt of $23.34 billion as of June 2025, stemming from its $55 billion Anadarko Petroleum acquisition in 2019 and subsequent $12 billion CrownRock purchase in 2024.
This energy sector divestment allows Occidental to refocus on core oil and gas operations, which generated 75% of total revenue last year. In the first half of 2025, OxyChem contributed $2.42 billion in revenues to Occidental’s portfolio.
Strategic Impact of Chemical Company Buyout
For Berkshire Hathaway, this petrochemical division acquisition marks the second major investment in the chemical sector following the 2011 Lubrizol purchase. The deal utilizes a portion of Berkshire’s record $344 billion cash reserves.
The Warren Buffett deal comes as the 95-year-old investor prepares to retire as CEO at year-end 2025. Greg Abel, currently Chairman of Berkshire Hathaway Energy, will succeed Buffett and has expressed enthusiasm about welcoming OxyChem as a new operating subsidiary.
Berkshire already owns approximately 28.2% of Occidental’s outstanding shares, making it the oil company’s largest stakeholder. Buffett began accumulating this position in February 2022, coinciding with Russia’s invasion of Ukraine and energy sector volatility.
Market Position After Acquisition
The Berkshire Hathaway OxyChem acquisition creates significant market advantages in essential chemical production. OxyChem manufactures chemicals for battery recycling, water chlorination, paper manufacturing, and PVC resin for infrastructure applications.
Similar to recent major corporate acquisitions in the technology sector, this cash transaction demonstrates continued appetite for large-scale deals despite economic uncertainties.
The petrochemical division operates manufacturing facilities across North America, producing specialty chemicals that serve critical infrastructure and healthcare needs. This positions Berkshire for steady cash flows in essential chemical markets.
What’s Next After the Deal
Following the energy sector divestment, Occidental Petroleum will emerge as a more focused oil and gas company with reduced debt burden. The debt reduction strategy addresses investor concerns about the company’s leverage following recent major acquisitions.
For Berkshire Hathaway, the chemical company buyout represents renewed confidence in large-scale investments as Buffett approaches his final months as CEO. The acquisition adds industrial diversification to Berkshire’s portfolio of wholly-owned subsidiaries.
Regulatory approvals remain pending for the Warren Buffett deal, though industry analysts expect smooth approval given Berkshire’s established track record in chemical sector investments. The transaction structure as an all-cash deal eliminates complex financing considerations.
The Berkshire Hathaway OxyChem acquisition concludes months of speculation about potential deals involving Buffett’s investment conglomerate, demonstrating continued strategic expansion even as leadership transition approaches.
FAQs:
Q1: Why is Warren Buffett buying OxyChem for $9.7 billion?
A: Berkshire Hathaway is acquiring OxyChem because it represents a stable, cash-generating business in essential chemical production. OxyChem manufactures commodity chemicals vital for water treatment, healthcare, pharmaceuticals, and infrastructure – providing predictable revenue streams. This acquisition complements Berkshire’s existing chemical business Lubrizol (acquired in 2011) and utilizes part of their record $344 billion cash reserves. Greg Abel, Buffett’s successor, has expertise in utilities and energy sectors, making this a strategic fit.
Q2: When will the Berkshire Hathaway OxyChem deal officially close?
A: The $9.7 billion all-cash transaction is expected to close in the fourth quarter of 2025, pending regulatory approvals and customary closing conditions. Both companies announced the definitive agreement on October 2, 2025. Industry analysts expect smooth regulatory approval given Berkshire’s established track record in chemical sector investments and the deal’s structure as a straightforward cash purchase without complex financing arrangements.
November 20, 2025