Warren Buffett’s Berkshire Hathaway has announced plans to buy Occidental Petroleum’s petrochemical unit, OxyChem, for $9.7 billion in cash.
The recent deal marks the largest acquisition since 2022, when the company paid $11.6 billion for insurer Alleghany Corporation.
As the result of the announcement, the shares of Occidental rose 2.3 percent in premarket trading as reported by Reuters.
The deal which includes the sale of OxyChem unit adds to a series of divestiture planned by the company to raise cash.
Being a major investor in Occidental, Berkshire holds a 28.2 percent stake as of the end of June.
OxyChem is known for manufacturing healthcare, water treatment, and other commercial chemicals. Occidental has been grappling with a massive debt load when it outbid Chevron to secure the richest shale oilfields in Texas.
According to Occidental, it will use $6.5 billion to pay its down debt, enabling the company to restart buying back stock.
“The problem has been getting our debt down faster, so this resolves the one outstanding issue that I think will now unlock our stock and allow shareholders to feel more comfortable, hopefully, to add to their positions and others to come in,” Occidental CEO Vicki Hollub said.
“So now we’re going to be able to start our sharing purchase program again....This is the last step that we needed in our major transformation that we started 10 years ago,” he added.