Berkshire Hathaway Acquires Occidental Petroleum's Chemical Division for $9.7 Billion

In a significant move that signals a potential shift in leadership dynamics at Berkshire Hathaway, the conglomerate has announced its acquisition of Occidental Petroleum’s chemical division, OxyChem, for $9.7 billion. This deal, unveiled on October 3, 2025, may mark one of the last major acquisitions orchestrated by Warren Buffett, the legendary investor and longtime CEO of Berkshire Hathaway.

While Buffett’s name was notably absent from the official communications regarding the acquisition, many speculate that he still played a crucial role behind the scenes. His longstanding relationship with Occidental’s CEO, Vicki Hollub, and his penchant for involvement in significant transactions suggest that he had a hand in this deal. Buffett is set to pass the CEO baton to Vice Chair Greg Abel in January 2026, which adds an intriguing layer to the acquisition’s narrative.

Berkshire Hathaway has amassed a staggering cash reserve of over $344 billion, a figure that has been steadily growing as Buffett has struggled to identify major acquisitions at attractive prices. The market has seen a surge in competition from hedge funds, driving up acquisition costs. The OxyChem deal, while substantial, represents less than 3% of Berkshire’s cash reserves and is unlikely to dramatically impact the conglomerate’s financial performance.

OxyChem specializes in producing various chemicals, including chlorine for water treatment, vinyl chloride for plastics, and calcium chloride for de-icing roads. This acquisition complements Berkshire’s existing portfolio, notably Lubrizol, which Buffett acquired in 2011 for $9 billion. Despite the size of the deal, Berkshire typically opts not to consolidate the operations of its acquisitions, maintaining a hands-off approach.

Analysts have noted that this acquisition may serve as a platform for Abel to showcase his leadership style as he prepares to take over the CEO role. Edward Jones analyst Jim Shanahan remarked on the importance of observing how Abel’s management approach might differ from Buffett’s. Abel is known for being more hands-on, which could lead to greater collaboration among Berkshire’s subsidiaries—a departure from Buffett’s traditional strategy of allowing acquired companies to operate independently.

The deal also has significant implications for Occidental Petroleum, which has been actively divesting assets to reduce its debt burden. Following the acquisition of CrownRock in December 2023, Occidental has sold approximately $4 billion in assets and aims to use $6.5 billion from the sale of OxyChem to lower its principal debt to below $15 billion. Despite the financial pressures, Occidental will retain all legacy environmental liabilities associated with OxyChem.

Berkshire Hathaway’s investment in Occidental extends beyond this acquisition. The conglomerate holds over 28% of Occidental’s stock, along with warrants for additional shares and preferred shares that provide substantial dividends. Buffett has expressed a commitment to maintaining Berkshire’s stake in Occidental, although he has indicated no intentions of acquiring the entire company.

As Berkshire Hathaway continues to evolve under new leadership, the OxyChem acquisition is poised to close in the fourth quarter of 2025, marking a new chapter for both the conglomerate and the chemical division it has acquired. With Buffett remaining as chairman and still influential in decision-making, the future of Berkshire Hathaway remains a topic of keen interest for investors and industry observers alike.