Buffett's Berkshire owns 19.2% of Occidental Petroleum after new acquisitions

Berkshire Hathaway Inc, run by billionaire Warren Buffett, announced this week that it purchased an additional 4.3 million shares of Occidental Petroleum Corp (NYSE:OXY), giving it a 19.2% stake in the oil company.

In a filing with the U.S. Securities and Exchange Commission on Wednesday, Berkshire said it spent about $250 million for the additional shares and now owns 179.4 million shares of Occidental common stock worth about $10.4 billion. The latest purchases bring Berkshire closer to 20% ownership, a threshold known as the equity method of accounting, which would allow it to recognize its proportionate share of Occidental's earnings along with its own results. Analysts on average expect Occidental's net income to exceed $10 billion this year, according to Refinitiv I/B/E/S. Berkshire uses the equity method for its 26.6% stake in packaged food company Kraft Heinz (NASDAQ:KHC) Co, which it controls with Brazilian private equity firm 3G Capital. But even though Berkshire is by far Occidental's largest shareholder, it could argue that its accounting should remain unchanged because its stake is passive. Berkshire also owns $10 billion of Occidental preferred stock, which pays an annual dividend of $800 million, and a warrant to buy another 83.9 million common shares for $5 billion. Occidental's share price has doubled this year, helped by rising oil prices following Russia's invasion of Ukraine. Some analysts think Berkshire could buy the entire Houston-based company, which has been reducing its debt since its acquisition of Anadarko Petroleum Corp (NYSE:APC) for $35.7 billion in 2019. Berkshire's preferred stock investment helped finance the Anadarko takeover. Berkshire bought BNSF railroad for $26.5 billion in 2010 after previously accumulating a 22.6% stake. Buffett's Omaha, Nebraska-based conglomerate also owns dozens of other businesses, including Geico car insurance and See's candies, and stocks such as Apple Inc (NASDAQ:AAPL) and Bank of America Corp (NYSE:BAC).