Warren Buffett’s Berkshire Hathaway has finalized a $9.7 billion all-cash deal to acquire OxyChem, the chemical division of Occidental Petroleum, marking Buffett’s largest acquisition since 2022. This major transaction likely represents one of Buffett’s final significant deals before his planned retirement as Berkshire CEO at the end of 2025. Berkshire already holds approximately 28% of Occidental’s shares and significant preferred stock, giving it a strong financial position to complete this acquisition. The deal is expected to close in the fourth quarter of 2025, subject to regulatory approvals.
Strategic Expansion in Chemicals and Asset Portfolio
OxyChem is recognized for producing key industrial chemicals such as chlorine for water treatment, vinyl chloride used in plastics manufacturing, and calcium chloride for road de-icing. Operating 21 facilities across the U.S., with additional plants in Canada and Chile, OxyChem supplies chemicals critical to pharmaceuticals, healthcare, construction, and commercial sectors. This acquisition expands Berkshire Hathaway’s footprint in the chemicals industry, complementing its existing subsidiary Lubrizol, acquired for $9 billion in 2011. The deal will allow OxyChem to continue operating as a standalone subsidiary under Berkshire’s stewardship, maintaining its strong management team and operational expertise.
Fueling Occidental’s Debt Reduction Strategy
For Occidental Petroleum, the divestiture of OxyChem is a pivotal step toward reducing its substantial debt, which grew to over $23 billion following its $55 billion Anadarko Petroleum acquisition in 2019 and the $12 billion purchase of CrownRock in 2024. Occidental plans to use approximately $6.5 billion of the sale proceeds to cut its principal debt below $15 billion, enabling the company to restart share buybacks and improve investor confidence. CEO Vicki Hollub emphasized that this transaction will accelerate the company’s ongoing financial transformation and repositioning to focus more on upstream oil and gas operations.
Leadership Transition and Long-Term Outlook
This transaction marks a significant moment as Warren Buffett prepares to pass Berkshire Hathaway’s CEO role to Vice Chairman Greg Abel, effective January 2026. Abel expressed confidence in the robustness of OxyChem’s business assets and workforce, anticipating continued growth and operational success under Berkshire Hathaway’s ownership. Although Buffett will retire as CEO, he will remain Berkshire’s chairman and continue to influence the use of the conglomerate’s sizable cash reserves, which have reached an all-time high of over $344 billion.
Conclusion: A Defining Deal for Berkshire and Occidental
Berkshire Hathaway’s acquisition of Occidental’s OxyChem business for $9.7 billion serves as both a strategic chemical industry expansion for Berkshire and a critical debt relief milestone for Occidental. This well-capitalized and timely transaction will have a lasting impact on both companies’ financial stability and strategic focus, while marking a defining chapter in Warren Buffett’s legendary investment career as his tenure as CEO comes to a close.