Berkshire in talks for $10 billion deal for Occidental's petrochemical unit, WSJ reports

Berkshire Hathaway is reportedly in talks to acquire Occidental Petroleum's OxyChem unit for approximately $10 billion. This potential divestiture would significantly help Occidental, where Berkshire is already the largest shareholder, address its substantial $23.34 billion debt load, largely accumulated from its Anadarko and CrownRock acquisitions. The OxyChem unit, which generated $2.42 billion in revenue in the first two quarters of 2025, supplies essential products to sectors like medical care and construction, offering a stable asset for Berkshire while providing crucial capital for Occidental's deleveraging efforts.

Analysis

Berkshire Hathaway is reportedly in discussions to acquire Occidental Petroleum's (OXY) petrochemical unit, OxyChem, for approximately $10 billion. This potential divestiture is a critical strategic maneuver for Occidental, primarily aimed at addressing its substantial debt load, which stood at $23.34 billion at the end of June. This leverage is a direct consequence of its $55 billion acquisition of Anadarko in 2019 and the more recent $12 billion purchase of CrownRock. A $10 billion cash infusion from this sale would allow OXY to reduce its stated debt by over 40%, representing a material deleveraging event that strengthens its balance sheet. For Berkshire Hathaway, already OXY's largest shareholder, this transaction would secure a stable, cash-generating asset; the OxyChem unit generated $2.42 billion in revenue in the first half of 2025 and serves non-cyclical end-markets like medical care and food security. The move aligns with OXY's ongoing strategy of divesting non-core assets to focus on its high-value shale oilfields in the Permian Basin.

Key Decisions for Investors

• Investors should view this potential divestiture as a significant de-risking event for Occidental Petroleum, as a successful $10 billion sale would materially improve its balance sheet and reduce financial leverage.
• It is crucial to monitor for a definitive agreement and the final sale price, as a transaction at or above the reported $10 billion valuation would serve as a strong positive catalyst for OXY's equity.
• Long-term holders should reassess Occidental's post-divestiture business profile, as the sale of the stable OxyChem unit increases the company's earnings concentration in the more volatile oil and gas production sector.