Berkshire Hathaway raises stake in Occidental Petroleum


Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) purchased an additional $590 million worth of Occidental Petroleum (OXY) shares. It comes after Occidental announced it is acquiring CrownRock in a $10.8 billion deal. With the new purchases, Berkshire now has a 27% stake in Occidental.

Yahoo Finance’s Seana Smith and Brad Smith explain the deal

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Video Transcript

SEANA SMITH: And Warren Buffett backing Occidental’s latest deal. Berkshire Hathaway scooping up another $590 million worth of Occidental this week, upping its stake in the company to 27%. Now, this buying activity following Occidental’s agreement to acquire CrownRock in a $10.8 billion deal.

So Warren Buffett has been slowly adding to his position of Occidental here over the last several years. This move here from Berkshire Hathaway coming on the heels of that deal. We have seen consolidation within the space, within the energy sector. Buffett at least thinking that maybe– Berkshire Hathaway more broadly thinking that, hey, this deal makes a lot of– makes a lot of sense here for Occidental and makes it even more attractive in the longer term.

BRAD SMITH: Yeah, this is still less than 4% of his entire portfolio. Apple really holds, kind of, the lion’s share roughly or just under 50% of the entire Berkshire Hathaway holdings. So all of this considered, Occidental has been one of the big bets. It’s been ripe for the investment that Berkshire Hathaway has, kind of, charted forth this pathway forward.

And ultimately, now, it’s a larger question of within the energy space, are there more acquisitions, more mergers that see further consolidation? And how does Occidental Petroleum, kind of position, itself within that realm as we move forward in 2024? That’s the question that we’ve continued to ask analysts whether or not they see more M&A in this space, especially considering what’s already come into the fray.

You think about some of the larger names, Exxon, that have found themselves squarely within these merger and consolidation discussions. Hess as well. And so there have been some big names within oil, and gas, and energy as a whole. But this 2024 hold the same type of deal making activity and I think that’s a larger question that Occidental is going to be trying to figure out too.

SEANA SMITH: Yeah, certainly. Well, Berkshire Hathaway’s total stake in Occidental now right around 27%. But I think the fact Berkshire even buying more shares of Occidental really just signals confidence that they have in this name at this point.

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