Warren Buffett’s Berkshire Hathaway Invests in 9.9 Million More of Occidental Shares

The new buy-in places Berkshire's stake in the petrochemical manufacturing company at 17.4%.

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Berkshire Hathaway has announced that it has increased its stake in Occidental Petroleum and purchased another 9.9 million shares of the company’s stock. Berkshire’s latest purchase gives the multinational conglomerate holding company a 17.4 percent stake in the hydrocarbon exploration and oil company.

Berkshire, led by CEO Warren Buffett, paid around $582 million for the new purchase of shares, which was purchased during the middle of last week, according to a U.S. Securities and Exchange Commission filing that was made on Friday night.

As of now, Berkshire Hathaway is Occidental’s biggest shareholder, owning 163.4 million shares worth an estimated $9.9 billion. According to Refinitiv, the next largest shareholder is Vanguard. Berkshire has around a 60 percent larger stake in Occidental than the Pennsylvania-based investment advisor company.

But, Berkshire has warrants to purchase more shares in Occidental Petroleum, 83.9 million more for $5 billion.

In 2022, Occidental share prices have more than doubled as Berkshire has invested in the company, which has been delving further into clean energy solutions. Occidental has also become more valuable as oil prices have risen following the Russian invasion into Ukraine.

Many analysts are speculating that the Omaha, Nebraska-based holding company will eventually go all in and buy all of Occidental’s shares.

Neal Dingmann, a Truist Securities analyst, said in a June research report that he predicted there was a “good chance” of Berkshire taking over Occidental once it becomes an investment-grade credit, adding that buying Occidental would diversify Berkshire’s energy investments.

Meanwhile, Occidental has been reducing its debt, which increased enormously when it purchased Anadarko Petroleum for $35.7 billion three years ago. At that time, Berkshire purchased $10 billion in Occidental’s preferred stock to aid in financing the purchase.

Berkshire Hathaway owns stock in Apple and Bank of America as well as having ownership in BNSF railroad and Geico, the second-largest auto insurer in the U.S.

Thus far in 2022, Berkshire Hathaway has seen its share prices drop by 8 percent.

 

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