Occidental may sell Oxychem petrochemical business for ~$10 billion, which would make the deal Berkshire's largest since 2022, The Wall Street Journal reported Tuesday.
A deal for the OxyChem unit, which generated nearly $5 billion in sales in the 12 months ended in June, would be Warren Buffett's second big bet on chemicals, after Berkshire (BRK.A) (BRK.B) acquired specialty chemicals producer Lubrizol for nearly $10 billion including debt in 2011.
The Financial Times reported on Sunday that Occidental (NYSE:OXY) was in talks for a $10 billion deal to sell OxyChem, but did not identify a buyer.
Occidental (OXY) CEO Vicki Hollub traveled to Nebraska in 2019 to visit Buffett, whose company agreed to buy $10 billion of preferred shares in OXY, boosting her effort to outbid Chevron to buy Anadarko Petroleum; the deal saddled the company with debt and attracted criticism, but Buffett doubled down on his bet, eventually buying up ~28% of OXY shares.
Occidental (OXY) has been selling non-core assets to raise cash to pay down debt, repaying $7.5 billion of debt as of August, while Berkshire (BRK.A) (BRK.B) is sitting on a massive cash pile totaling a record $344 billion at the end of June.
I am not a big fan. Occidental ranks at a low 72nd position near the bottom of my ranking. The main reasons for the low ranking are: (1) high long-term debt (> $ 23 B), (2) high PE ratio (> 20), and (3) low shareholder returns (<2%).
A $ 10 B sale of Oxychem will improve the balance sheet. The interest paid can reduce from $ 1.3 B to $ 0.7 B per year and together with a reduction in depreciation/amortization will improve profitability and the FCF. Combined that however will not be enough to fix the high PE ratio or the low shareholder returns.
Occidental may sell Oxychem
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Petroleum economist
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Occidental sells Oxychem to Berkshire Hathaway
Berkshire Hathaway Inc. to Acquire OxyChem
OMAHA and HOUSTON, October 2, 2025 – Berkshire Hathaway (NYSE: BRK) and Occidental (NYSE: OXY) today announced a definitive agreement for Berkshire Hathaway to acquire Occidental’s chemical business, OxyChem, in an all-cash transaction for $9.7 billion, subject to customary purchase price adjustments. OxyChem is a global manufacturer of commodity chemicals vital to quality of life, with applications in water treatment, pharmaceuticals, healthcare and commercial and residential development.
“This transaction strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the last decade. I’m incredibly proud of the impressive work the team has done to create this strategic opportunity that will unlock 20+ years of low-cost resource runway and deliver meaningful near and long-term value,” said Vicki Hollub, President and Chief Executive Officer. “OxyChem has grown under Occidental into a well-run, safely operated business with best-in-class employees, and we are confident the business and those employees will continue to thrive under Berkshire Hathaway’s ownership.”
“Berkshire is acquiring a robust portfolio of operating assets, supported by an accomplished team,” said Greg Abel, Vice Chairman of Non-Insurance Operations at Berkshire. “We look forward to welcoming OxyChem as an operating subsidiary within Berkshire. We commend Vicki and the Occidental team for their commitment to Occidental’s long-term financial stability, as demonstrated by their plan to use proceeds to reinforce the company’s balance sheet.”
Transaction Details
Under the terms of the agreement, Occidental will sell OxyChem to Berkshire Hathaway for cash consideration of $9.7 billion, subject to customary purchase price adjustments. Occidental expects to use $6.5 billion of the transaction proceeds to reduce debt and achieve the target of principal debt below $15 billion set following the December 2023 announcement of its CrownRock acquisition. An Occidental subsidiary will retain OxyChem’s legacy environmental liabilities, and Glenn Springs Holdings Inc. will continue to manage existing remedial projects for that subsidiary. The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals and other customary closing conditions. Additional details are available in a presentation on the investor section of Occidental’s website.
The rumor turns out to be true.
OMAHA and HOUSTON, October 2, 2025 – Berkshire Hathaway (NYSE: BRK) and Occidental (NYSE: OXY) today announced a definitive agreement for Berkshire Hathaway to acquire Occidental’s chemical business, OxyChem, in an all-cash transaction for $9.7 billion, subject to customary purchase price adjustments. OxyChem is a global manufacturer of commodity chemicals vital to quality of life, with applications in water treatment, pharmaceuticals, healthcare and commercial and residential development.
“This transaction strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the last decade. I’m incredibly proud of the impressive work the team has done to create this strategic opportunity that will unlock 20+ years of low-cost resource runway and deliver meaningful near and long-term value,” said Vicki Hollub, President and Chief Executive Officer. “OxyChem has grown under Occidental into a well-run, safely operated business with best-in-class employees, and we are confident the business and those employees will continue to thrive under Berkshire Hathaway’s ownership.”
“Berkshire is acquiring a robust portfolio of operating assets, supported by an accomplished team,” said Greg Abel, Vice Chairman of Non-Insurance Operations at Berkshire. “We look forward to welcoming OxyChem as an operating subsidiary within Berkshire. We commend Vicki and the Occidental team for their commitment to Occidental’s long-term financial stability, as demonstrated by their plan to use proceeds to reinforce the company’s balance sheet.”
Transaction Details
Under the terms of the agreement, Occidental will sell OxyChem to Berkshire Hathaway for cash consideration of $9.7 billion, subject to customary purchase price adjustments. Occidental expects to use $6.5 billion of the transaction proceeds to reduce debt and achieve the target of principal debt below $15 billion set following the December 2023 announcement of its CrownRock acquisition. An Occidental subsidiary will retain OxyChem’s legacy environmental liabilities, and Glenn Springs Holdings Inc. will continue to manage existing remedial projects for that subsidiary. The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals and other customary closing conditions. Additional details are available in a presentation on the investor section of Occidental’s website.
The rumor turns out to be true.