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Warren Buffett’s investment vehicle Berkshire Hathaway has increased its stake in Occidental Petroleum further, paying some $350 million in three purchases in the past few days, adding close to 5.8 million shares to its already substantial interest in the company.
According to CNBC, Berkshire Hathaway’s stake in Occidental, after the latest purchases, stands at 200.2 million shares and is worth some $12.2 billion, based on the closing price of the stock on Tuesday.
Berkshire Hathaway has been buying stock in Occidental for more than a year now, raising its stake from below 14% to over 20%. The purchases sparked speculation that the investment firm may be planning to take over the oil company, especially after it received regulatory approval to buy up to 50 % of Occidental last year.
Three years ago, Berkshire Hathaway funded Oxy’s takeover of Anadarko with $10 billion in the form of equity. It was as part of this deal that the investment firm received the stock purchase warrants that could see it acquire 20% or more in Occidental.
Occidental bought Anadarko for $55 billion in 2019, making it one of the biggest M&A deals in energy over the past few years. In that, it outbid Chevron, which had earlier announced a bid for the energy company.
To date, as part of the funding deal, Berkshire Hathaway holds $10 billion worth of Oxy preferred stock and warrants for another 83.9 million shares.
CNBC noted in its report that Occidental’s chief executive Vicki Hollub had recently met with Warren Buffett and they’d discussed the oil and gas industry and the technology used in it.
The last time Berkshire bought Oxy stock was last September, raising its stake to 21.4%. This has now risen further to 22.2%, according to Reuters. The stake will result in annual dividends worth $144 million.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com