Occidental Petroleum (NYSE: OXY) shares slipped on Thursday following news that Berkshire Hathaway (NYSE: BRK), its largest investor, has agreed to purchase Occidental’s OxyChem division for $9.7 billion in cash. A move that could benefit the Omaha-based company in the near future, considering the recovery trend of global petrochemical business.
With this deal, Berkshire, which owns a 28.2% stake in Occidental, will make OxyChem an operating subsidiary. This acquisition ranks as Berkshire Hathaway’s second-largest foray into the chemicals industry, trailing its 2011 acquisition of Lubrizol, and stands as its most significant overall transaction since acquiring Alleghany for $11.6 billion in 2022.
OxyChem manufactures essential industrial chemicals such as chlorine, caustic soda, and PVC—key components for sectors including water treatment, pharmaceuticals, and construction. Its reliable demand profile has rendered it a relatively defensive business, even during economic slowdowns.
In a statement, Berkshire Vice Chairman Greg Abel—set to become the company’s CEO in 2026—described the acquisition as the addition of a “robust portfolio of operating assets, supported by an accomplished team.”
Occidental’s stock has endured a challenging year, declining roughly 10% in 2025. The shares fell more than 6% on Thursday alone, with the drop preceding the sale driven by weaker oil prices and the lingering effects of debt accrued from previous takeovers. Ongoing volatility in energy markets has prompted Occidental to seek ways to strengthen its long-term outlook and reassure investors.
Analysts at Roth MKM, cited by Reuters, noted that divesting OxyChem may hinder Occidental’s free cash flow growth in the coming years since the unit was projected to play a significant role in earnings expansion.
According to Occidental’s 2Q25 financial statement, the company generated $6.41 billion in revenue, with $1.23 billion contributed by its chemical segment. OxyChem generated $213 million in pretax earnings for its parent company in the second quarter.
The sharp decline in Occidental’s share price on Thursday suggests that investors viewed OxyChem as a valuable growth driver, and its sale raised concerns about the company’s future earnings potential—despite Berkshire Hathaway’s optimism about adding the petrochemical business to its own portfolio.
Beyond providing immediate liquidity, the transaction could reshape market sentiment about Occidental’s willingness to rationalize its asset portfolio and focus its core operations. The company plans to use $6.5 billion of the proceeds to pay down debt, and CEO Vicki Hollub stated that this reduction would enable a resumption of share buybacks.
The acquisition of OxyChem by Berkshire Hathaway could give global investors some hint about where the petrochemical trend will go, judging from historical success of the “Oracle of Omaha” and his company.
The deal is scheduled to close in the fourth quarter. Moody’s Ratings has described the sale of OxyChem as a credit positive for Occidental Petroleum.
Meanwhile, Fitch Ratings states that Occidental Petroleum Corp’s (BBB-/Positive) sale of its chemical subsidiary Occidental Chemical Corp (OxyChem) to a Berkshire Hathaway subsidiary will not immediately affect Occidental Petroleum’s rating or Outlook. However, it is likely to significantly accelerate the company’s progress toward its debt targets, as well as improve key credit metrics, including midcycle EBITDA/leverage and midcycle FFO/interest coverage.
