His last big deal as Berkshire’s CEO before Abel took over?

(This is Warren Buffett Watch newsletter, news and analysis of all things Warren Buffett and Berkshire Hathaway. You can register here get it every Friday night in your inbox.)

The deal is based on already close relationships between companies: Berkshire is Occidental’s most largest shareholder with a The bet of nearly 27% at the time worth $ 11.9 billionS

In addition, Occidental pays an 8% dividend to over $ 8 billion preferred shares held by Berkshire after that, which was actually, Oxy help loan to buy Anadarko Petroleum in 2019S

As part of this deal, Berkshire is also now wearing Varants to buy nearly 84 million additional Oxy shares for just under $ 60 per share, which is higher than their current price just under $ 45.

Despite these relationships, Buffett told shareholders two years ago Berkshire will not try to acquire Occidental in its entirety.

In a Live interview on the CNBC box“The morning of the message, CEO Vicky Holub said he would use $ 6.5 billion from the Oxychem purchase price to reduce his debt by bringing it below the target of $ 15 billion when he Buy Permian Basin Produer Crownrock At the end of 2023, for $ 12 billion.

“Now we will be able to start our stock redemption program again …

“The thing we had to do was improve our balance. So this is the last big step we need and now I think we have left and work to appreciate the creation that will come at a much faster rate for our shareholders.”

Wall Street is not as positive as Holub is related to the deal.

Occidental Petroleum shares fell as much 8.1% on Thursday, on the day of the message, but then bounced slightly back to close the week by 5.5% drop.

Baron is dumb In his assessment: “The result of one for Warren Buffett at the expense of Occidental Petroleum CEO Vicky Holub.”

Writes, It is expected to target higherS

In addition, Occidental will lose a chemical business that has helped distinguish it from energy rivals.

He will also face a $ 1.7 billion tax hit, which would be removed if Berkshire uses his preferred Oxy shares to pay for the deal, as some had expected.

This means that Occidental is likely to continue to pay Berkshire over $ 600 million in dividends each year until the preferred shares are intended to be bought in 2029.

Fortune, On the other hand, highlights the benefits of Occidental to reduce the workload of debt.

He quotes the Wolfe Research Doug Leggate analyst, calling the “winning plus plus deal for Berkshire, as it also helps the company it owns (approximately) 30% of. It’s completely self-serving, but logical and not in any way-definitely useful.”

This is the way Greg Abel of Berkshire played it Transaction news It’s interesting that it never mentions Buffett’s name.

“We congratulate Vicky and the oxidant team on their commitment to Occidental’s long -term financial stability, as shown by their plan to use revenue to strengthen the company’s balance.”

Warren Buffett explains How the sequence helped him and Charlie Munger gradually embed Berkshire Hathaway into what he is today.

The holdings are from June 30, 2025, as reported in 13F Submission of Berkshire Hathaway On August 14, 2025, except for:

The full list of farms and current market values ​​is available from CNBC.com Berkshire Hathaway Portfolio TrackerS

Please send any questions or comments about the newsletter to me on alex.crimpen@nbcuni.comS (Excuse me, but we don’t send questions or comments to Buffett himself.)

If you are no longer subscribed to this newsletter, you can register hereS

Also, Buffett’s annual letters to shareholders are highly recommended reading. Have been collected Here on the Berkshire websiteS

– Alex Krippen, editor, Warren Buffett clock