Occidental Petroleum Corp. finalized the sale of its chemical division, OxyChem, to Berkshire Hathaway for $9.7 billion in cash on January 2, 2026. The transaction removes a high‑margin, cash‑generating business from Occidental’s portfolio and delivers a $9.7 billion cash infusion that will reduce the company’s debt by $6.5 billion and eliminate roughly $350 million in annual interest expense.
The divestiture is part of Occidental’s strategy to sharpen its focus on oil and gas exploration and production after a series of debt‑financed acquisitions. OxyChem had been a non‑core asset with significant capital‑expenditure requirements; selling it at a peak in capex was intended to free capital for core operations. Analysts noted that the sale price—about nine times 2024 earnings—was lower than some valuations, raising concerns that the company may have undervalued a stable, high‑margin segment.
Financially, the $9.7 billion cash proceeds will be used to pay down long‑term debt, reducing interest costs and improving liquidity. Occidental will retain OxyChem’s legacy tort claims and environmental liabilities through a subsidiary, ensuring that the buyer assumes operational value while the seller manages long‑term remediation costs. The sale also removes a reliable cash generator, increasing Occidental’s exposure to commodity price volatility and capital intensity in its core business.
Market reaction to the deal reflected a mix of optimism about debt reduction and caution over the timing and price. Some analysts highlighted the loss of a stable cash generator and the potential for higher capital requirements, while others viewed the transaction as a classic Buffett play that diversifies Berkshire’s portfolio with a proven industrial asset. The overall sentiment was that the balance‑sheet benefits outweigh the strategic trade‑offs, but the sale’s valuation and timing remain points of debate.
Vicki Hollub, Occidental’s president and CEO, said the transaction “accelerates our strategy to strengthen Occidental’s balance sheet and focus on our deep and diverse oil and gas portfolio.” She added that the proceeds would enable a restart of the company’s share‑repurchase program. Greg Abel, Berkshire’s vice chairman of non‑insurance operations, noted that the acquisition “provides a robust portfolio of operating assets supported by an accomplished team,” underscoring the confidence in OxyChem’s operational strength.
OxyChem’s product mix—polyvinyl chloride, chlor‑alkali, and chlorinated organic chemicals—serves key markets in water treatment, pharmaceuticals, and construction. The division operated in the United States, Canada, and Latin America, contributing a significant portion of Occidental’s pre‑sale revenue. The sale removes this diversified revenue stream, making Occidental more exposed to the cyclical nature of the oil and gas sector.
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