Warren Buffett's Berkshire Hathaway is in talks to buy Occidental Petroleum's petrochemicals business for about $10 billion, sources told The Wall Street Journal. According to them, the deal may be announced in the coming days.

If negotiations don't fall apart, the deal would be the largest for Berkshire since its $11.6 billion purchase of insurance company Alleghany in 2022.

Context

Berkshire is already the largest shareholder of Occidental itself, an oil and gas company with a capitalization of about $46 billion. Buffett's company, which is going to leave the post of CEO at the end of the year, has accumulated a huge cash cushion: at the end of June, the volume of cash and treasury bills of the company reached a record amount of $344 billion. At the meeting of shareholders in May, Buffett said that Berkshire almost invested $10 billion, but in the end the deal did not take place. He did not disclose what kind of investment Berkshire was considering, but said, "We're willing to spend $100 billion. It's easy to make those decisions when an opportunity comes along that makes sense to us, makes sense to us and offers good value.

Occidental, in turn, is selling off non-core assets to raise funds to repay its debt. On September 28, the Financial Times quoted sources as saying that Occidental was negotiating the sale of its petrochemical division OxyChem, but could not find out with whom. The newspaper's sources said that the negotiations could still end without results, while Occidental itself did not respond to requests for comment.

OxyChem manufactures and sells chemical products for a variety of uses, including water chlorination, battery recycling and paper production. The unit had revenue of nearly $5 billion in the 12 months ended June. The potential purchase of OxyChem would be Buffett's second major bet on the chemical industry. In 2011, Berkshire acquired specialty chemicals maker Lubrizol for nearly $10 billion including debt.

This article was AI-translated and verified by a human editor

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