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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 Trade (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 virtually 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 widespread shares for slightly below $60 per share, which is larger than their present value slightly 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 reside interview on CNBC’s “Squawk Field” the morning of the announcement, CEO Vicki Hollub mentioned it should 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 would have liked to do was enhance our stability 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 return at a a lot quicker tempo for our shareholders.”
Wall Road is not as optimistic as Hollub is concerning 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 cut price as a result of earnings within the sector are depressed this 12 months” and are anticipated to move larger.
As well as, Occidental will probably be shedding a chemical enterprise that helped differentiate it from power rivals.
It can even be dealing with a $1.7 billion tax hit that will 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, alternatively, highlights the advantages to Occidental of decreasing 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 approach—positively 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 identify.
“We commend Vicki and the Occidental staff for his or her dedication to Occidental’s long-term monetary stability, as demonstrated by their plan to make use of proceeds to strengthen 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 through the Berkshire Hathaway Inc annual shareholders’ assembly in Omaha, Nebraska, U.S., Might 3, 2024.
Scott Morgan | Reuters
Buffett bust bought for charity
BUFFETT AROUND THE INTERNET
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HIGHLIGHTS FROM THE ARCHIVE
How you can 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 in the present day.
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, primarily based on in the present day’s closing costs.
Holdings are as of June 30, 2025, as reported in Berkshire Hathaway’s 13F submitting on August 14, 2025, apart from:
The complete listing of holdings and present market values is accessible from CNBC.com’s Berkshire Hathaway Portfolio Tracker.
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Additionally, Buffett’s annual letters to shareholders are extremely really helpful studying. There are collected right here on Berkshire’s web site.
— Alex Crippen, Editor, Warren Buffett Watch
