Warren Buffett is reportedly eyeing Berkshire Hathaway's biggest deal in three years

Core Insights - Berkshire Hathaway is nearing a deal to acquire Occidental Petroleum's petrochemical unit OxyChem for approximately $10 billion, marking a significant transaction for the company [1][2] - This potential acquisition could be Berkshire's largest since the $11.6 billion purchase of insurer Alleghany in 2022, highlighting the company's ongoing investment strategy [2] - Berkshire Hathaway currently holds a record cash reserve of $344 billion, providing ample liquidity for such acquisitions [2] Company Developments - Warren Buffett, aged 95, will step down as CEO of Berkshire Hathaway at the end of 2025 but will continue as chairman, with Greg Abel, known for his expertise in the energy sector, set to succeed him [3] - Berkshire Hathaway owns over $11 billion worth of Occidental stock, representing a 28.2% stake, indicating a strong existing relationship with the company [4] - Buffett previously supported Occidental's acquisition of Anadarko Petroleum in 2019 with a $10 billion investment, receiving preferred shares and warrants in return [4] Market Reactions - Despite the news of the potential acquisition, shares of Occidental Petroleum fell by 1.8% on the day the report was released, reflecting market skepticism or profit-taking [3] - Occidental has been actively investing in a carbon capture business and offers a 2% dividend yield, which may appeal to investors looking for sustainable energy solutions [5] Investment Strategy - Buffett began purchasing Occidental common stock in early 2022, capitalizing on market volatility during the COVID-19 pandemic to acquire shares at a discount [5] - The ongoing investment in Occidental and the potential acquisition of OxyChem align with Berkshire's strategy of investing in energy and related sectors [5]