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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 data 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 present valued at $11.9 billion.
As well as, Occidental is paying an 8% dividend on greater than $8 billion in most popular 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 practically 84 million further OXY widespread shares for just below $60 per share, which is larger than their present worth just below $45.
Regardless of these ties, Buffett advised shareholders two years in the past Berkshire won’t attempt to purchase Occidental in its entirety.
In a stay interview on CNBC’s “Squawk Field” the morning of the announcement, CEO Vicki Hollub stated it would use $6.5 billion of the OxyChem buy worth 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 would have liked to do was enhance our steadiness sheet. So that is that final huge step that we want and now I feel we’re off and working to worth creation that is going to come back at a a lot sooner tempo for our shareholders.”
Wall Avenue 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 worth “could possibly be a cut price as a result of earnings within the sector are depressed this 12 months” and are anticipated to go larger.
As well as, Occidental shall be dropping a chemical enterprise that helped differentiate it from vitality rivals.
It can even be dealing with a $1.7 billion tax hit that will have been eradicated had Berkshire used its OXY most popular shares to pay for the deal, as some had anticipated.
Which means 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 utterly self-serving, it is logical, and—not in any nefarious method—positively useful.”
That is the best way Berkshire’s Greg Abel performed it in the deal’s information launch that, curiously, by no means talked about Buffett’s identify.
“We commend Vicki and the Occidental group 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 steadiness 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., Might 3, 2024.
Scott Morgan | Reuters
Buffett bust offered for charity
BUFFETT AROUND THE INTERNET
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HIGHLIGHTS FROM THE ARCHIVE
The right way to take a small enterprise to the subsequent degree (2008)
Warren Buffett explains how consistency helped him and Charlie Munger regularly construct Berkshire Hathaway into what it’s at the moment.
BERKSHIRE STOCK WATCH
BERKSHIRE’S TOP STOCK HOLDINGS – Oct. 3, 2025
Berkshire’s prime holdings of disclosed publicly traded shares within the U.S., Japan, and Hong Kong, by market worth, primarily based on at the moment’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 total record of holdings and present market values is on the market from CNBC.com’s Berkshire Hathaway Portfolio Tracker.
QUESTIONS OR COMMENTS
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Additionally, Buffett’s annual letters to shareholders are extremely really useful studying. There are collected right here on Berkshire’s web site.
— Alex Crippen, Editor, Warren Buffett Watch
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