Occidental climbs after selling chemical business to Buffett's Berkshire

Investing.com -- Occidental Petroleum shares rose about 0.8% in premarket trading on Thursday after the company announced it would sell its chemical division, OxyChem, to Warren Buffett’s Berkshire Hathaway for $9.7 billion in cash.

The agreement, subject to customary adjustments, will transfer Occidental’s commodity chemical operations to Berkshire, where they will become a new operating subsidiary.

OxyChem manufactures products used in water treatment, pharmaceuticals, healthcare, and construction.

Occidental President and Chief Executive Officer Vicki Hollub said the deal would significantly strengthen the company’s energy focus.

“This transaction strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the last decade,” she said.

Hollub added that OxyChem “has grown under Occidental into a well-run, safely operated business with best-in-class employees, and we are confident the business and those employees will continue to thrive under Berkshire Hathaway’s ownership.”

Berkshire Vice Chairman Greg Abel praised the acquisition, highlighting OxyChem’s existing assets and workforce. “Berkshire is acquiring a robust portfolio of operating assets, supported by an accomplished team,” he said. “We look forward to welcoming OxyChem as an operating subsidiary within Berkshire.”

Occidental said it would use $6.5 billion of the proceeds to reduce debt, a step toward lowering its principal debt below $15 billion.

The company noted that an Occidental subsidiary would retain OxyChem’s environmental liabilities, managed through Glenn Springs Holdings Inc.

The transaction is expected to close in the fourth quarter of 2025, pending regulatory approvals.

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