Warren Buffett’s Berkshire Hathaway has committed $9.7 billion to acquire OxyChem, a major U.S. chemical manufacturing subsidiary of Occidental Petroleum. The move underscores growing confidence in industrial resilience and long-term chemical demand.
- Berkshire Hathaway acquired OxyChem for $9.7 billion.
- OxyChem generates $4.2 billion in annual EBITDA.
- Valuation at approximately 11x EBITDA, reflecting stable industrial pricing.
- Acquisition expands Berkshire’s footprint in petrochemicals and downstream materials.
- Deal signals renewed investor confidence in long-duration industrial assets.
Berkshire Hathaway’s acquisition of OxyChem for $9.7 billion marks one of the largest industrial investments by Warren Buffett in recent years. The deal positions Berkshire as a dominant player in the North American chemicals sector, gaining control of OxyChem’s extensive network of petrochemical facilities, including production sites in Louisiana, Texas, and California. This strategic expansion aligns with Buffett’s preference for capital-intensive businesses with durable competitive advantages and predictable cash flows. The transaction reflects a broader reassessment of industrial assets amid rising demand for plastics, fertilizers, and specialty chemicals driven by infrastructure development and energy transition initiatives. OxyChem’s core products—ethylene, polyethylene, and chlorine-based compounds—are critical inputs across agriculture, construction, and packaging industries. With global chemical consumption projected to grow at a compound annual rate of 3.5% through 2030, the acquisition secures access to high-margin downstream applications. Financially, OxyChem generates approximately $4.2 billion in annual EBITDA, representing a valuation multiple of roughly 11x, which is consistent with peer benchmarks for mature, asset-heavy chemical producers. The acquisition also diversifies Berkshire’s portfolio beyond traditional sectors like insurance and consumer goods, reducing exposure to cyclical volatility while strengthening its industrial foundation. Market reactions have been positive, with Berkshire Hathaway’s stock posting a 1.8% uptick following the announcement. Investors view the move as a signal that large-cap industrial assets remain undervalued relative to their long-term earnings potential. The deal also may influence other institutional investors to reevaluate their exposure to commodity-linked manufacturing platforms.