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Buffett seen as ‘winner’ in what could also be his final huge purchase as CEO
A display shows the buying and selling info for Occidental Petroleum on the New York Inventory Alternate (NYSE) in New York Metropolis, U.S., October 2, 2025.
Brendan McDermid | Reuters
The deal builds on an already shut relationship between the businesses: Berkshire is Occidental’s largest shareholder with a stake of just about 27% at the moment valued at $11.9 billion.
As well as, Occidental is paying an 8% dividend on greater than $8 billion in most well-liked shares held by Berkshire after what was, in impact, a mortgage to assist OXY purchase Anadarko Petroleum in 2019.
As a part of that deal, Berkshire additionally now holds warrants to purchase almost 84 million extra OXY frequent shares for slightly below $60 per share, which is increased than their present value slightly below $45.
Regardless of these ties, Buffett instructed shareholders two years in the past Berkshire is not going to attempt to purchase Occidental in its entirety.
In a dwell interview on CNBC’s “Squawk Field” the morning of the announcement, CEO Vicki Hollub mentioned it is going to use $6.5 billion of the OxyChem buy value to cut back its debt, bringing it beneath the $15 billion goal set when it purchased Permian Basin producer CrownRock in late 2023 for $12 billion.
“Now we’re going to have the ability to begin our share repurchase program once more …
“The factor that we wanted to do was enhance our stability sheet. So that is that final huge step that we want and now I believe we’re off and working to worth creation that is going to return at a a lot sooner tempo for our shareholders.”
Wall Road is not as optimistic as Hollub is in regards to the deal.
Occidental Petroleum shares fell as a lot 8.1% on Thursday, the day of the announcement, however then bounced again a bit to shut out the week with a 5.5% drop.
Barron’s is blunt in its evaluation: “Rating one for Warren Buffett on the expense of Occidental Petroleum CEO Vicki Hollub.”
It says the acquisition value “might be a discount as a result of earnings within the sector are depressed this 12 months” and are anticipated to move increased.
As well as, Occidental might be dropping a chemical enterprise that helped differentiate it from vitality rivals.
It can even be going through a $1.7 billion tax hit that may have been eradicated had Berkshire used its OXY most well-liked shares to pay for the deal, as some had anticipated.
Meaning Occidental will most likely proceed to pay Berkshire greater than $600 million in dividends every year till the popular shares are scheduled to be redeemed in 2029.
Fortune, however, highlights the advantages to Occidental of lowering its debt load.
It quotes Wolfe Analysis analyst Doug Leggate calling the deal a “win-plus for Berkshire as a result of it additionally helps the corporate that they personal [roughly] 30% of. It is fully self-serving, it is logical, and—not in any nefarious method—undoubtedly useful.”
That is the way in which Berkshire’s Greg Abel performed it in the deal’s information launch that, curiously, by no means talked about Buffett’s title.
“We commend Vicki and the Occidental workforce for his or her dedication to Occidental’s long-term monetary stability, as demonstrated by their plan to make use of proceeds to bolster the corporate’s stability sheet.”
Berkshire takes formal step to organize for Abel’s new job
Gregory Abel, Vice Chairman overseeing non-insurance operations for Berkshire Hathaway, meets shareholders within the exhibition corridor in the course of the Berkshire Hathaway Inc annual shareholders’ assembly in Omaha, Nebraska, U.S., Could 3, 2024.
Scott Morgan | Reuters
Buffett bust bought for charity
BUFFETT AROUND THE INTERNET
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HIGHLIGHTS FROM THE ARCHIVE
The best way to take a small enterprise to the subsequent stage (2008)
Warren Buffett explains how consistency helped him and Charlie Munger regularly construct Berkshire Hathaway into what it’s right now.
BERKSHIRE STOCK WATCH
BERKSHIRE’S TOP STOCK HOLDINGS – Oct. 3, 2025
Berkshire’s high holdings of disclosed publicly traded shares within the U.S., Japan, and Hong Kong, by market worth, based mostly on right now’s closing costs.
Holdings are as of June 30, 2025, as reported in Berkshire Hathaway’s 13F submitting on August 14, 2025, aside from:
The complete checklist of holdings and present market values is offered from CNBC.com’s Berkshire Hathaway Portfolio Tracker.
QUESTIONS OR COMMENTS
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Additionally, Buffett’s annual letters to shareholders are extremely advisable studying. There are collected right here on Berkshire’s web site.
— Alex Crippen, Editor, Warren Buffett Watch
