On January 2, 2026, Occidental Petroleum Corporation (Oxy) officially announced that Warren Buffett's Berkshire Hathaway had completed the acquisition of its chemical subsidiary, OxyChem, with a total transaction value of $9.7 billion. This deal not only marks Berkshire's largest acquisition since its $13.7 billion purchase of Alleghany Insurance in 2022 but is also interpreted by the market as a key strategic move by Buffett to counter-cyclically invest in the chemical industry. Simultaneously, it provides significant momentum for Occidental Petroleum to alleviate debt pressure and focus on its core oil and gas business.

In the closing statement, Vicki Hollub, President and CEO of Occidental Petroleum, emphasized: "This transaction accelerates Occidental's strategy to strengthen the company's balance sheet and enables us to concentrate resources on our transformed, deeply diversified oil and gas portfolio. By divesting non-core chemical assets, the company will further enhance the competitiveness and risk resilience of its core business."

Public information shows that OxyChem, as a leading player in the chlor-alkali and polyvinyl chloride (PVC) sectors in North America, operates across the United States, Canada, and Latin America. Its products are widely used in essential fields such as construction, healthcare, and food packaging, demonstrating stable cash flow generation capabilities. Financial data reveals that in 2024, the subsidiary achieved sales of $4.9 billion and earnings of $1.1 billion. With an annual caustic soda capacity of 1.5 million tons and supporting PVC production lines, OxyChem holds significant scarcity value amid industry-wide supply constraints.

Notably, as the chemical industry's sentiment shows marginal improvement, the chlor-alkali index has exhibited a steady recovery trend. On January 5, 2026, the Chlor-Alkali Index (CI005416) closed at 1,470.21 points, up 1.85% from the previous day, with a total market capitalization exceeding ¥193.8 billion, laying a solid market foundation for post-acquisition business development.

The acquisition originated from Berkshire Hathaway's formal announcement in October 2025 and was completed within three months. In essence, this transaction represents a win-win collaboration addressing the strategic needs of both parties:

For Occidental Petroleum, the deal is a core component of its $4 billion asset divestiture plan. The company had previously earmarked $6.5 billion of the proceeds specifically for debt repayment, aiming to reduce its debt below $15 billion. It is reported that Occidental's debt stood at approximately $24 billion at the end of 2024. Through asset divestitures and debt repayments in the first half of 2025, its debt decreased to $48.18 billion by the end of the second quarter, with the debt-to-asset ratio dropping from 58.7% to 57.1%. The completion of this transaction will further advance its debt optimization goals.

For Berkshire Hathaway, the acquisition not only strategically empowers Occidental Petroleum but also represents a significant step in deepening its presence in the chemical sector. As a strategic investor holding substantial shares in Occidental, Berkshire achieves enhanced industrial chain synergies through this acquisition—OxyChem's products can complement the logistics network of Berkshire's BNSF Railway and the advanced manufacturing operations of Precision Castparts Corp. This synergy is expected to reduce OxyChem's logistics costs by 15–20% while improving supply chain stability.

This marks Buffett's second major bet on the chemical industry. As early as 2011, Berkshire acquired specialty chemical producer Lubrizol for the same $9.7 billion, reflecting its sustained confidence in the long-term value of the chemical industry.

Market analysis widely suggests that Buffett's move aligns precisely with the cyclical characteristics of the chemical industry, which is currently in a "bottoming-out and recovery" phase. The global chemical industry is at the trough of the Juglar cycle, with valuations at historically low levels. Meanwhile, tightening environmental regulations on the supply side and demand driven by the new energy industry are steering the industry's supply-demand structure toward a healthier direction.

An Oriental Securities research report notes that Buffett's investment in OxyChem is primarily driven by the long-term value of the chlor-alkali chemical industry, with energy-intensive products like PVC expected to follow in the footsteps of MDI in recovering market sentiment. CITIC Securities adds that Buffett's entry further strengthens market confidence in the chemical sector, clarifying the trading logic around three main themes: demand driven by energy storage, industry self-regulation to curb internal competition, and the continuation of high-growth segments.

Industry insiders further highlight that, supported by low-cost float capital from Berkshire's insurance business, this acquisition offers significant funding cost advantages and is expected to deliver substantial long-term returns for Berkshire. Additionally, OxyChem's production base locations near natural gas fields and its EPA-certified green production processes will continue to unlock value amid the global energy transition and tightening carbon tariff policies, positioning it as a potential "ballast" asset in Berkshire's investment portfolio.