Berkshire Hathaway buys 9.9 million Occidental shares

Warren Buffett's Berkshire Hathaway (NYSE:BRKa) Inc. announced that it has acquired another 9.9 million shares of Occidental Petroleum Corp (NYSE:OXY), giving it a 17.4% stake in the oil company.

Berkshire paid about $582 million for the shares it bought between Wednesday and Friday, according to a filing with the US Securities and Exchange Commission on Friday night. Buffett's company is Occidental's largest shareholder and currently holds 163.4 million shares worth about $9.9 billion. Buffett's stake is about 60% larger than that of the next largest shareholder, Vanguard, according to Refinitiv data. Berkshire also has warrants to buy another 83.9 million Occidental shares for $5 billion. Occidental's share price has more than doubled this year, benefiting from Berkshire's purchases as well as rising oil prices following Russia's invasion of Ukraine. The Berkshire investment has led to market speculation that Buffett's Omaha, Nebraska-based conglomerate could eventually buy all of Occidental. In a June 23 research report, Truist Securities analyst Neal Dingmann rated the chances of Berkshire taking over Occidental as "high" after Occidental achieved an investment grade credit rating and said the acquisition would help diversify Berkshire's energy portfolio. Occidental is reducing its debt, which increased when it acquired Anadarko Petroleum Corp (NYSE:APC) for $35.7 billion in 2019. To help finance that acquisition, Berkshire bought $10 billion of Occidental preferred stock and acquired warrants at the time. It also had a $25.9 billion stake in oil company Chevron Corp (NYSE:CVX) at the end of March. Berkshire's share price has fallen 8% this year, compared to a 20% drop in the Standard & Poor's 500. Buffett's company owns dozens of businesses, including the BNSF railroad, Geico car insurance and the eponymous energy business, as well as stocks such as Apple Inc (NASDAQ:AAPL) and Bank of America Corp (NYSE:BAC). Source: Reuters