Berkshire Hathaway’s $9.7 Billion OxyChem Acquisition Signals Buffett Era’s End

Berkshire Hathaway’s Strategic Leap: OxyChem Acquisition Redefines Its Chemical Portfolio

When Berkshire Hathaway announced its $9.7 billion acquisition of OxyChem, the chemical arm of Occidental Petroleum, the business world took notice. Not only does this mark the conglomerate’s largest deal in three years, but it also stands as a pivotal moment—likely the final major acquisition led by legendary investor Warren Buffett before his retirement as CEO at year’s end.

OxyChem is a household name in the industrial sector, producing chemicals essential for everyday life: chlorine for clean water, vinyl chloride for plastic production, and calcium chloride for safer roads in winter. With this purchase, Berkshire Hathaway is deepening its commitment to the chemical industry, supplementing its existing subsidiary, Lubrizol, which it acquired back in 2011 for $9 billion.

The deal’s timing and structure are telling. Berkshire will pay the entire $9.7 billion in cash, a testament to its robust liquidity—its cash reserves currently exceed $344 billion, according to Forbes. The transaction is expected to close in the fourth quarter of 2025, pending regulatory approval.

Leadership Transition: Buffett Steps Aside, Abel Steps Up

Perhaps most notable is the absence of Warren Buffett’s name from the official announcement. Instead, Vice Chair Greg Abel, the CEO-in-waiting, took center stage, signaling Berkshire Hathaway’s evolving leadership. “Berkshire is acquiring a robust portfolio of operating assets, supported by an accomplished team,” Abel stated, as quoted by Associated Press. “We look forward to welcoming OxyChem as an operating subsidiary within Berkshire.”

Buffett, who has steered Berkshire for over six decades, will remain as chairman, continuing to shape major decisions—especially those involving the company’s formidable cash pile. Yet, the transition to Abel is more than symbolic. Abel’s expertise in energy and non-insurance operations, honed during his tenure at Berkshire Hathaway Energy, aligns closely with the strategic direction of the OxyChem acquisition.

Debt Reduction and Occidental’s New Path

For Occidental Petroleum, the sale is more than a mere business transaction—it’s a lifeline. The company has been under pressure to pare down debt after its $10.8 billion acquisition of CrownRock in late 2023. Since then, Occidental has sold roughly $4 billion in assets, aiming to bring its debt below the $15 billion threshold. The OxyChem deal directly supports this goal: Occidental plans to use $6.5 billion of the proceeds to pay down its obligations, reinforcing its long-term financial stability.

OxyChem’s financial performance has faced headwinds, with pretax earnings slipping to $213 million in the second quarter of 2025 from nearly $300 million previously. In August, Occidental lowered its full-year forecast for OxyChem’s pretax income by about 15%, citing market oversupply. Nevertheless, the chemical unit remains a vital asset, producing not only PVC for construction and medical use but also sodium hydroxide and other chemicals critical to healthcare and infrastructure.

Buffett’s Legacy: Investment Philosophy Meets Modern Competition

Berkshire Hathaway’s portfolio is a mosaic of iconic brands and industries—insurance giants like Geico, railroad operator BNSF, utilities, and consumer favorites such as Dairy Queen and See’s Candy. Its stock holdings, valued at over $250 billion, include heavyweights like Apple, Coca-Cola, Bank of America, and American Express.

Buffett’s approach to acquisitions has always centered on value. Yet, in recent years, rising competition from hedge funds and private equity has driven prices higher, limiting opportunities for the kind of large-scale purchases that defined his tenure. Before OxyChem, Berkshire’s last major acquisition was the $11.6 billion purchase of Alleghany Insurance in 2022.

Buffett’s history with Occidental runs deep. In 2019, he committed $10 billion to help Occidental acquire Anadarko Petroleum, receiving $8.5 billion in preferred shares with an 8% annual dividend. Berkshire currently holds more than 28% of Occidental’s common stock and warrants for additional shares, but Buffett made it clear in 2023 that a full takeover of Occidental wasn’t in the cards.

Market Impact: What the OxyChem Deal Means for Berkshire and Beyond

The acquisition is more than a portfolio expansion—it’s a strategic bet on the chemical sector’s resilience and growth. OxyChem brings Berkshire not only diversified revenue but also synergies with Lubrizol and potential leverage in global supply chains for water treatment, plastics, and healthcare materials.

For investors, the move is a signal that Berkshire is willing to deploy its vast cash reserves when the right opportunity arises, even as Buffett’s direct involvement wanes. It also demonstrates Occidental’s commitment to financial discipline, using asset sales to reduce leverage and stabilize its balance sheet.

With whispers of the deal circulating days before the official announcement, the market’s response was swift. Observers noted that the absence of Buffett’s name pointed to a new era at Berkshire—one defined by Abel’s stewardship and, perhaps, a more aggressive approach to capital deployment.

As the fourth quarter approaches and regulatory reviews commence, the OxyChem acquisition will be closely watched—not only for its immediate impact on Berkshire Hathaway’s bottom line but also as a marker of the company’s evolving identity.

The OxyChem acquisition is both a capstone to Warren Buffett’s storied career and a harbinger of Berkshire Hathaway’s future under Greg Abel. The deal reflects Buffett’s disciplined investment philosophy, yet it also acknowledges the shifting competitive landscape and leadership transition. Ultimately, it’s a calculated step that preserves Berkshire’s legacy while positioning it for continued relevance in a rapidly changing market.