Warren Buffett’s Berkshire Hathaway is set to make its most significant acquisition in three years, marking a major shift in the company’s strategic direction. In New York, the conglomerate has announced a $9.7 billion deal to acquire OxyChem, a key chemical division of Occidental Petroleum—a move that surpasses its previous largest transaction, the $11.6 billion purchase of Alleghany in 2022. At 95 years old, Buffett recently confirmed he will step down as CEO by year-end, signaling a new era for the iconic firm.
OxyChem, a cornerstone of Occidental’s operations, produces essential chemicals used in everything from medical IV bags to swimming pools and caustic soda—a critical ingredient in paper, aluminum production, and battery recycling. The $6.5 billion cash portion of this deal will directly reduce Occidental’s staggering $20 billion debt burden, a move that could stabilize the company’s financial health. According to OxyChem’s website, the business has evolved into a well-managed, safety-focused operation with top-tier employees, and Occidental CEO Vicki Hollub expressed confidence that Berkshire’s ownership will ensure continued growth.
While Occidental’s shares rose just 1% in premarket trading, the deal’s closure in Q4 2024 raises questions: Will this strategic pivot help Occidental regain control of its finances, or does it risk overextending Berkshire’s resources? And here’s where it gets controversial—some argue that acquiring a debt-laden business like OxyChem could undermine Berkshire’s long-term value-oriented strategy. What do you think? Is this a smart move, or a gamble in an unpredictable market?
