Warren Buffett’s Berkshire Hathaway is reportedly closing in on its largest acquisition in three years: the purchase of Occidental Petroleum’s petrochemical division, OxyChem, for roughly $10 billion. The potential deal, first reported by The Wall Street Journal, could be finalized within days.

If completed, it would mark Berkshire’s biggest move since 2022, when it acquired insurer Alleghany for $11.6 billion. The Omaha-based conglomerate is well positioned for a major purchase, with a record cash reserve of $344 billion on its balance sheet.

Berkshire’s Energy Bet

OxyChem, the chemical arm of Houston-based Occidental Petroleum, produces chlorine, caustic soda, and other basic chemicals widely used in manufacturing. The sale would allow Occidental to streamline its focus on oil and gas production while Berkshire deepens its investments in the energy sector.

The move also comes as Berkshire is preparing for a leadership transition. Buffett, now 95, is set to step down as CEO at the end of 2025, though he will remain chairman. His designated successor, Greg Abel, currently vice chairman of Berkshire’s non-insurance operations and former CEO of Berkshire Hathaway Energy, has a strong background in power generation and natural resources. Analysts say the OxyChem deal could reflect Abel’s influence and signal Berkshire’s continued appetite for energy-related assets.

A Longstanding Relationship with Occidental

Berkshire already has deep ties to Occidental. As of June, it owned more than $11 billion in Occidental stock, representing a 28.2% stake. Buffett has repeatedly praised the company’s management but has emphasized he does not intend to acquire it outright.

His involvement with Occidental dates back to 2019, when he provided $10 billion in financing to help the company acquire Anadarko Petroleum. That investment secured Berkshire preferred shares and warrants to buy common stock. In 2022, Buffett increased his exposure by purchasing billions of dollars’ worth of Occidental shares on the open market, a move inspired by a single earnings call transcript.

Occidental currently pays a 2% dividend and has expanded into carbon capture projects, an area that aligns with growing investor interest in cleaner energy technologies.

Market Reaction

Despite the report, shares of Occidental fell 1.8% on Tuesday, a sign that investors may be weighing the implications of shedding the profitable chemical business. Analysts note that while OxyChem has historically provided steady cash flow, the sale could strengthen Occidental’s balance sheet and reduce debt.

For Berkshire, the acquisition would provide another stable revenue stream at a time when Buffett’s firm is holding unprecedented levels of cash, a point the investor has acknowledged as both a strength and a challenge.

If the $10 billion OxyChem purchase is finalized, it will further cement Buffett’s legacy of bold bets in the energy industry—and offer an early glimpse into how Berkshire may be shaped under Greg Abel’s leadership.

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