Berkshire Hathaway: Buffett’s Berkshire Hathaway owns 18.7% of Occidental after another 12 million share purchase

Warren Buffett’s Berkshire Hathaway Inc said on Thursday it bought an additional 12 million shares of Occidental Petroleum Corp this week, giving it an 18.7% stake in the oil company.

The purchases were made Tuesday and Wednesday and cost about $698 million, Berkshire said in a U.S. Securities and Exchange Commission filing.

Buffett’s company also bought 9.9 million shares of Occidental last week.

He is by far the largest shareholder in Houston-based Occidental, holding 175.4 million shares worth $10.8 billion.

Berkshire also owns $10 billion of preferred stock in Occidental and has warrants to buy an additional 83.9 million common shares for $5 billion, or $59.62 each. That’s slightly below Thursday’s closing price of $61.47.

Occidental’s share price has more than doubled this year, helped by Berkshire purchases as well as rising oil prices following Russia’s invasion of Ukraine.

Berkshire’s growing stake has sparked market speculation that Buffett’s company could eventually buy all of Occidental.

Should the stake reach 20%, Berkshire could consider an accounting change that would allow it to record its proportionate share of Occidental’s profits with its own results.

Berkshire uses the equity method to account for its 26.6% stake in Kraft Heinz Co, the packaged food company.

Buffett’s Omaha, Nebraska-based conglomerate owns dozens of companies, including railroad BNSF, auto insurer Geico and its namesake energy company, as well as stocks including Apple Inc and Bank of America Corp. .

Occidental has reduced debt since buying Anadarko Petroleum Corp for $35.7 billion in 2019. Berkshire’s preferred stock investment helped fund that takeover.

Berkshire’s share price has fallen 7% this year, compared to an 18% decline in the Standard & Poor’s 500. (Report by Arunima Kumar in Bengaluru and Jonathan Stempel in New York Edited by Shailesh Kuber and Matthew Lewis )

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