Occidental Petroleum sells OxyChem to its largest shareholder Berkshire Hathaway
On October 2, 2025, Occidental Petroleum (OXY) announced the sale of its chemicals division, OxyChem, to Berkshire Hathaway for $9.7 billion in cash, with the transaction expected to close in Q4 2025 pending approvals. This divestiture allows OXY to accelerate debt reduction, using $6.5 billion of proceeds to cut principal debt below $15 billion from approximately $23.3 billion as of June 30, 2025. By streamlining operations, OXY can focus on its core oil and gas business amid volatile energy markets, potentially unlocking investments in low-carbon projects and upstream resources.
OXY's debt carries a weighted average interest rate of around 4.4% to 5.1%, with Q2 2025 interest expense at $276 million and $594 million for the first half. The debt composition includes fixed-rate senior notes ranging from 3.2% to 7.95%. The sale is projected to save approximately $350 million annually in interest, representing a roughly 30% reduction in interest payments.
OxyChem contributed around $1 billion in pre-tax income in 2024 (down from a 2022 peak of $2.5 billion due to softening chemical margins) , Berkshire can easily cover this on cycles and profit massively on the cycle up.
For Berkshire, it adds a stable, cash-generating asset to its portfolio at a reasonable 8-9x EBITDA multiple. OxyChem, a major producer of essential commodity chemicals like chlorine and PVC, fits perfectly alongside Berkshire’s existing chemical subsidiary, Lubrizol, adding stability and diversification to its non-insurance operations. Berkshire Hathaway is Occidental's largest shareholder, with a substantial equity stake (over 28%) and holding $8.5 billion in 8% Cumulative Perpetual Preferred Stock. This guaranteed annual cash payment to Berkshire Hathaway is roughly $800 million, so Berkshire has a major interest in keeping $OXY (Occidental Petroleum Corp) healthy and paying.
Sources:
www.oxy.com/siteassets/investors/earnings/strategic-transaction-update.pdf$OXY$OIL$BRK.B (Berkshire Hathaway Inc)... Show More
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Fri Feb 13 2026 08:48:27 GMT+0000 (Coordinated Universal Time)
