Berkshire Hathaway Makes Its Biggest Buy in 3 Years

Berkshire Hathaway is making its biggest move in years, announcing a $9.7 billion cash purchase of OxyChem, the petrochemical arm of Occidental Petroleum. The acquisition is Berkshire's largest since it bought insurer Alleghany for $11.6 billion in 2022, and it comes as Warren Buffett's tenure as CEO nears its end; he'll step down at the end of the year, though he'll stay on as chairman. The buy won't make much of a dent in the $344 billion in cash Berkshire has on hand—just shy of its all-time high, notes CNBC.

OxyChem produces chemicals for water treatment and other uses and is a leading provider of PVC, per Quartz. Berkshire, which already owns a 28.2% stake in Occidental, has played a key role in the company since 2019, when Buffett helped CEO Vicki Hollub outbid Chevron and acquire Anadarko Petroleum.

The Wall Street Journal observes that "Occidental's fortunes have waxed and waned since then. The deal saddled the company with debt," and Occidental plans to use $6.5 billion from the deal to pay that debt down, with Hollub suggesting the move will clear the way for the resumption of share buybacks. The deal is expected to close in the fourth quarter. This marks Berkshire's return to the chemical sector for the first time since its $10 billion purchase of Lubrizol in 2011.