1. Berkshire Hathaway to acquire Occidental's OxyChem for $9.7 billion. 2. Occidental's shares drop over 6% after announcing the divestment. 3. OxyChem was expected to significantly contribute to Occidental's future cash flow. 4. The deal reflects Berkshire's expanding chemical portfolio post-Alleghany acquisition. 5. Buffett plans to step down as CEO of Berkshire by year-end.
This acquisition strengthens Berkshire's diverse portfolio, aligning with past successful acquisitions like Alleghany. Historical data shows Berkshire's acquisitions typically lead to long-term stock appreciation.
The transaction is significant given its size and potential impact on Berkshire's cash flow and strategic position. Divestments from Occidental indicate a strategic realign and could determine future Berkshire performance.
The purchase may enhance Berkshire's profitability over several years, similar to their past acquisitions that took time to show returns. Earnings from OxyChem can bolster BRK-A's financial health in subsequent quarters.