Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.A) (BRK.B), has long been celebrated for his ability to distill complex business realities into simple, pointed observations. Among his many remarks is one that underscores the value of financial strength in maintaining a competitive edge, first captured in his 1989 letter to Berkshire Hathaway shareholders: “As businessmen, Charlie [Munger] and I relish having competitors who are unable to fund capital expenditures.” This comment reflects a cent ...

Berkshire Hathaway ( BRK.B ) announced on Thursday that it would be buying Occidental Petroleum's ( OXY ) OxyChem unit for nearly $10 billion. Berkshire already owns a substantial position in Occidental, but this acquisition presents an opportunityFreelance writer focused on ETFs, portfolio management and macro.To receive notifications of new articles and blog posts as soon as they're published, click on the orange Follow button and become a real-time follower.Analyst’s Disclosure:I/we have no stock, option ...

This was me a few months ago. I live in Brazil, so I flew for 10+ hours to Omaha with the main purpose of attending the Berkshire Hathaway Inc. (NYSE: BRK.B ) meeting, and it wasEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to reach out for collaborations or to connect!Analyst’s Disclosure:I/we have a beneficia ...

Core Viewpoint - Occidental Petroleum is undergoing a transformational transaction with Berkshire Hathaway acquiring its chemicals subsidiary, OxyChem, for $9.7 billion, which will significantly reshape Occidental's business and financial profile [1][2][6]. Group 1: Transaction Details - Berkshire Hathaway is purchasing OxyChem for $9.7 billion in cash, which is a global manufacturer of essential commodity chemicals [3]. - OxyChem operates 23 facilities worldwide and produces key items such as caustic soda and PVC [3]. - The acquisition is expected to enhance OxyChem's profitability, with an anticipated $325 million increase in annualized EBITDA by 2026 due to ongoing investments [4]. Group 2: Financial Implications for Occidental - Occidental plans to use $6.5 billion of the proceeds from the sale to repay debt, aiming to reduce its principal debt below $15 billion [6][9]. - Achieving this debt reduction will save Occidental over $350 million annually in interest expenses, thereby boosting its free cash flow [9]. - The remaining $1.5 billion will enhance Occidental's financial flexibility, allowing for opportunistic share repurchases and additional debt repayments [9]. Group 3: Strategic Focus - The sale of OxyChem will allow Occidental to sharpen its focus on oil and gas production, unlocking significant low-cost resources [10][11]. - This strategic shift is expected to create long-term growth potential for Occidental as it concentrates on developing its vast oil and gas resources [11].

Group 1 - Warren Buffett is recognized as a legendary investor, and Berkshire Hathaway Inc. (BRK.B) is highly regarded by many investors for its consistent stellar performance over time [1] - Binary Tree Analytics (BTA) has a background in investment banking cash and derivatives trading, focusing on providing transparency and analytics for capital markets instruments and trades [1] - BTA specializes in Closed-End Funds (CEFs), Exchange-Traded Funds (ETFs), and Special Situations, aiming to deliver high annualized returns with a low volatility profile [1]

Group 1 - Warren Buffett is recognized as a legendary investor, and Berkshire Hathaway Inc. (BRK.B) is highly regarded by many investors for its consistent stellar performance over time [1] - Binary Tree Analytics (BTA) has a background in investment banking cash and derivatives trading, focusing on providing transparency and analytics in capital markets instruments and trades [1] - BTA specializes in Closed-End Funds (CEFs), Exchange-Traded Funds (ETFs), and Special Situations, aiming to deliver high annualized returns with a low volatility profile [1]

Core Viewpoint - Berkshire Hathaway has officially announced the acquisition of Occidental Petroleum's chemical business, OxyChem, for $9.7 billion in cash, marking a significant strategic move for both companies [1][3]. Group 1: Transaction Details - The acquisition of OxyChem represents Occidental Petroleum's largest asset sale in its history and is a crucial step in its strategy to reduce debt following several large acquisitions [3]. - Occidental plans to use $6.5 billion of the proceeds from the sale to pay down debt, aiming to achieve a target of "debt principal below $15 billion" by December 2023 after acquiring CrownRock [3]. - This transaction is Berkshire Hathaway's largest acquisition since the $13.7 billion purchase of Alleghany Insurance in 2022 and marks its second significant investment in the chemical sector [3]. Group 2: Strategic Implications - The acquisition is expected to strengthen Berkshire's financial position and aligns with Warren Buffett's investment philosophy of acquiring quality assets at low prices [3]. - OxyChem's business is seen as complementary to Berkshire's existing assets, enhancing its chemical portfolio [3]. - Berkshire's vice chairman, Greg Abel, expressed optimism about OxyChem becoming an operational subsidiary of the group and endorsed Occidental's decision to optimize its balance sheet [3]. Group 3: Market Reactions - Analysts from Roth MKM suggest that OxyChem could have supported Occidental's expansion, and its sale may hinder future free cash flow growth [4]. - Scotiabank analyst Paul Cheng indicated that the transaction price appears low, as he previously valued OxyChem at approximately $12 billion [4].

Group 1: Berkshire Hathaway Acquisition - Berkshire Hathaway confirmed a nearly $10 billion acquisition of Occidental Petroleum's petrochemical division, marking its largest deal since 2022 [2] - Following the announcement, shares of Occidental Petroleum fell by 7.3%, while Berkshire Hathaway shares experienced fractional losses [2] Group 2: Fair Isaac and Credit Bureaus - Fair Isaac (FICO) shares surged by 18% after announcing it would provide consumer credit scores directly to firms selling consolidated credit reports to mortgage providers, reducing reliance on major credit bureaus [3][7] - Shares of competing credit bureaus, Equifax and TransUnion, dropped significantly, with Equifax down 8.5% and TransUnion nearly 11% [3] Group 3: Cryptocurrency Market - Major cryptocurrencies, including Bitcoin, saw a revival, contributing to a 7.5% increase in shares of Coinbase Global, the largest U.S. crypto exchange [4] - Robinhood Markets, which also offers crypto trading, saw its shares rise by 4.1% as the CEO predicted significant impacts from the tokenization of real-world assets [4] Group 4: Intel and AMD - Intel shares gained 3.8% amid reports that Advanced Micro Devices (AMD) is in early talks to become a customer of Intel's foundry business [5] - Intel's stock has doubled in value since reaching its year-to-date low in April, driven by investments from Nvidia, SoftBank, and the U.S. government [5] Group 5: AES Corp and Market Reactions - Shares of AES Corp, a renewable energy provider, fell by 7% after reports of advanced negotiations for a potential acquisition by Global Infrastructure Partners, owned by BlackRock [8]

Core Insights - Berkshire Hathaway is acquiring Occidental Petroleum's chemical unit, OxyChem, for $9.7 billion in cash, marking its largest deal in three years just before Warren Buffett's retirement as CEO [1][9] - Berkshire has significantly increased its stake in Occidental Petroleum, reaching 32.7% by August 2025, making it the sixth-largest holding in its portfolio [2] - The acquisition focuses solely on OxyChem, a key manufacturer of chemicals, rather than full control of Occidental [3] Financial Performance - OxyChem generated $1.1 billion in operating income for the fiscal year ending December 31, 2024, contributing approximately 16% to Occidental's total income [6] - Occidental's capital expenditures for OxyChem are projected to rise by $200 million to $900 million in 2025, indicating a commitment to growth in this segment [6] Debt and Financial Strategy - The sale of OxyChem will provide Occidental with $6.5 billion to repay debt, enhancing its balance sheet and allowing for potential share repurchases and dividend growth [7] - Occidental's debt concerns have been exacerbated by its $12 billion acquisition of CrownRock in 2024, primarily financed through borrowing [7] Market Implications - The divestiture of OxyChem will position Occidental as a more focused oil and gas company, increasing its vulnerability to fluctuations in commodity prices [8]

Occidental Petroleum (OXY) is losing ground on Thursday after famed investor Warren Buffett’s conglomerate Berkshire Hathaway (BRK.A) (BRK.B) confirmed plans of buying its petrochemical unit – OxyChem. Berkshire has agreed to pay $9.7 billion in cash for OxyChem, which makes it the giant’s largest deal since 2022. The transaction adds to Berkshire’s existing 28.2% stake in OXY shares. More News from Barchart Despite today’s decline, Occidental Petroleum stock remains up some 25% versus its year-to-dat ...