- Berkshire Hathaway closed its $9.7B all-cash purchase of Occidental's OxyChem on January 2, 2026.
- Occidental will apply $6.5B of proceeds to cut debt, targeting principal debt below $15B after its CrownRock deal.
- OxyChem stays a standalone Berkshire subsidiary led by CEO Wade Alleman, with operations across the U.S., Canada, and Latin America.
- Occidental retains legacy environmental and tort liabilities while Berkshire takes on a cyclical commodity-chemicals business with regulatory and input-cost risks.
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The Berkshire-OxyChem deal, announced in October 2025 and closed on January 2, 2026, transfers ownership of Occidental’s chemical business to Berkshire Hathaway for $9.7 billion in cash, subject to purchase price adjustments. Occidental plans to use $6.5 billion of those proceeds to reduce its principal debt to below $15 billion, a target set after its 2023 acquisition of CrownRock. This marks one of Occidental’s largest asset divestitures as it refocuses on its core oil and gas operations.
OxyChem is a major producer of commodity chemicals—including polyvinyl chloride (PVC), chlor-alkali (chlorine, sodium hydroxide), chlorinated organics, and calcium chloride—with operations across the United States, Canada, and Latin America. Under Berkshire, it will operate as a standalone subsidiary under its current leadership, with Wade Alleman remaining as president and CEO. Occidental retains legacy tort claims and environmental liabilities via a subsidiary, while Glenn Springs Holdings will manage remedial activities.
For Berkshire, this deal strengthens its industrial portfolio by adding a business with essential, steady-demand products, thereby diversifying earnings and aligning with its long-held preference for resilient, asset-based operations. It is its largest acquisition since Alleghany in 2022. For Occidental, the deal serves as a lever for deleveraging—addressing debt accumulated from big M&A, including the Anadarko acquisition in 2019 and CrownRock in 2023—while repositioning toward upstream energy opportunities.
Strategically, this transaction underscores several implications and trade-offs. On the upside, Berkshire gains stable cash flows tied to durable end-markets—water treatment, pharmaceuticals, residential construction—potentially benefiting from infrastructure spending and growth in sustainability. It also consolidates control over a business whose inputs and outputs are closely linked to energy markets, offering a partial hedge amid its other energy-exposed holdings.
On the risk side, commodity chemical businesses remain subject to input-price volatility (natural gas, chlorine), demand cyclicality (especially building and manufacturing cycles), and regulatory/environmental exposure. Although Occidental retains environmental legacy liabilities, operating risk still exists for Berkshire, particularly around safety, emissions, and future regulatory tightening. Also, Berkshire’s capital deployment opportunity cost—particularly as valuation multiples in chemicals may be under pressure—must be considered.
Open questions remain: how Berkshire will integrate OxyChem into its existing chemical ventures (e.g. Lubrizol), whether it will invest further in capacity expansion or modernization, how pricing and margins will evolve in current market surplus conditions, how regulatory risk (e.g. emissions, supply-chain sustainability) may affect cost of capital or operations, and how Occidental’s remaining environmental and tort liabilities may affect financial or reputational spillovers. Additionally, investor reaction to the loss of a stable chemical cash flow piece in Occidental may pressure expectations around share repurchases or dividends.
Supporting Notes
- The sale price for OxyChem is $9.7 billion in cash, subject to the usual purchase price adjustments.
- Occidental will use $6.5 billion of proceeds to reduce its debt, targeting principal debt below $15 billion, a goal set after its CrownRock acquisition in December 2023.
- OxyChem remains under the leadership of Wade Alleman, and will operate as a subsidiary of Berkshire Hathaway.
- Occidental retains OxyChem’s legacy tort claims and environmental liabilities; Glenn Springs Holdings will manage remediation.
- OxyChem’s product lines include PVC, chlor-alkali, chlorinated organic chemicals, and calcium chloride, operable across the U.S., Canada, and Latin America.
- OxyChem had revenue of approximately $2.42 billion in the first half of 2025; Occidental’s earnings last year were ~75% from oil & gas.
- This is Berkshire’s largest acquisition since its 2022 purchase of Alleghany Corporation.
- The closing date was January 2, 2026; the deal was expected to close in Q4 2025 pending regulatory approvals but did not face material delay.