Warren Buffett Set to Make Berkshire Hathaway’s Biggest Move in Three Years: What You Need to Know

Warren Buffett’s Berkshire Hathaway is on the verge of a significant move: a deal to acquire Occidental Petroleum’s petrochemical branch, OxyChem, for about $10 billion. This news comes from a report by the Wall Street Journal, which suggests that the deal could close within days.

If finalized, this would be Berkshire’s biggest acquisition since it purchased the insurer Alleghany for $11.6 billion in 2022. Currently, Berkshire has a hefty cash reserve of $344 billion, allowing it to make substantial investments.

At 95 years old, Buffett plans to step down as CEO by the end of 2025, but he will continue as chairman. His successor, Greg Abel, brings solid experience from his time as CEO of Berkshire Hathaway Energy, making him well-suited for this energy-focused deal.

Despite the potential acquisition news, Occidental’s shares dipped by 1.8%. Berkshire already owns over $11 billion of Occidental stock, holding a 28.2% stake. Interestingly, Buffett has previously stated that he does not intend to take full control of the oil company.

Buffett’s involvement with Occidental dates back to 2019, when he supported its acquisition of Anadarko Petroleum with a $10 billion investment, which included preferred shares. He began buying Occidental stock in early 2022, taking advantage of lower prices during the pandemic.

Occidental also offers a 2% dividend yield and is investing in carbon capture technology, which aligns with growing environmental concerns and corporate sustainability efforts.

The ongoing trends in the energy sector highlight the importance of strategic investments. Recent studies show that sustainable energy investments are not only crucial for the environment but can also offer competitive financial returns. As the world shifts towards greener solutions, companies like Occidental that focus on carbon capture could play a critical role in the future.

For more details on this developing story, you can check out the original Wall Street Journal article.

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