AP Photo/Reed Saxon, file
In this Jan. 26, 2010 photo, the Occidental Petroleum headquarters building is seen in Los Angeles. Occidental Petroleum Corp. said Tuesday, Oct. 19, 2010, its third-quarter net income increased 28 percent as the Los Angeles company produced oil and gas in record amounts.(AP Photo/Reed Saxon, file)
Houston-based company Occidental Petroleum will sell its chemical business, OxyChem, for $9.7 billion to Berkshire Hathaway, Warren Buffett’s holding company.
Oxychem produces chemicals used in water treatment, healthcare, pharmaceuticals and development.
According to a joint news release, Occidental plans to use $6.5 billion from the sale to pay down its debt and reach its goal of bringing its principal debt below $15 billion after it acquired oil and gas producer CrownRock.
“This transaction strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the last decade,” Occidental President and Chief Executive Officer Vicki Hollub said in the news release. “I’m incredibly
proud of the impressive work the team has done to create this strategic opportunity that will unlock 20+ years of low-cost resource runway and deliver meaningful near and long-term value.
“OxyChem has grown under Occidental into a well-run, safely operated business with best-in-class employees, and we are confident the business and those employees will continue to thrive under Berkshire Hathaway’s ownership.”
In 2019, Berkshire helped finance Occidental’s acquisition of Anadarko Petroleum, offering up $10 billion for the deal.
“Berkshire is acquiring a robust portfolio of operating assets, supported by an accomplished team,” Vice Chairman of Non-Insurance Operations at Berkshire Greg Abel said in the news release. “We look forward to welcoming OxyChem as an operating subsidiary within Berkshire.
“We commend Vicki and the Occidental team for their commitment to Occidental’s long-term financial stability, as demonstrated by their plan to use proceeds to reinforce the company’s balance sheet.”