Warren Buffett Boosts Occidental Petroleum Stake Yet Again

Warren Buffett’s Berkshire Hathaway bought shares in Occidental Petroleum for the third time this month, boosting its stake in the company to 23.6 percent.

The investment firm paid $216 million for the shares, which it bought on two separate days, Reuters reported, citing a regulatory filing.

The purchase follows a series of three stock purchases worth $350 million in early March, which pushed Berkshire’s stake in oxy to over 20 percent, and then another one, worth $466.68 million, made in the middle of the month.

According to the Reuters report, this month’s stock purchases have cost Berkshire Hathaway over $1 billion.

Berkshire Hathaway has been buying stock in Occidental since last year, sparking speculation about a possible takeover. The speculation got a boost in August last year when it emerged that the investment firm had asked regulators for approval to purchase up to 50 percent of the oil company.

The approval was granted promptly but unnamed sources told the Wall Street Journal at the time that Warren Buffett has no intention of taking over Occidental.

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 percent or more in Occidental.

To date, Berkshire is Oxy’s largest shareholder. Besides the purchase warrants, the company owns $10 billion worth of Oxy preferred stock, which carries an 8-percent dividend. Its stake in the company is worth some $12.6 billion based on Oxy’s latest closing price.

Oxy 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.

By Charles Kennedy for Oilprice.com

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