https://www.reuters.com/business/energy/occidental-talks-sell-oxychem-unit-least-10-billion-ft-reports-2025-09-28/
65 replies (most recent on top)
@kp You say BH loaned Oxy $10 billion. I must’ve missed that. When did that occur?
The market has spoken. Stock down 7.3%
Buffet is laughing his way to the bank at VH's expense.
@rb At this point, it’s 50/50. Both are dominated with opinions with no facts. At least the OCC sale is remotely related to layoffs.
Wake up, people!
Vicki played Warren once and is about to do it again.
The so called "Oracle of Omaha" is no match for "Bama Buffoon."
You say comments are disappointing. We can start talking about politics again if you want.
@qy “Cost of Oxy chemicals is about 10 billion. What Oxy owes WB is about the same...Smart move.” What in the world are you talking about??
@qy Oxy doesn’t owe WB anything because WB didn’t loan Oxy anything. Rather, WB made an investment in the company at very favorable terms. Oxy doesn’t have the option to “pay WB back”. Even if Oxy wanted to buy WB’s shares of the company back (share buyback), by somehow trading OxyChem for his OPC stock, that doesn’t help Oxy pay off debt now does it.
Here are the facts. Oxy wants to pay down debt now. They can do so by selling OxyChem for what seems to be a fair price of ~$10 billion. That is in lieu of hundreds of million of dollars per year from OxyChem profit. It’s that simple.
Having chemicals in the portfolio made sense. When oil prices are low you have lower feedstock prices. It helps smooth things out.
Cost of Oxy chemicals is about 10 billion. What Oxy owes WB is about the same...Smart move. Chemicals division has been a dependable asset and will continue in the future. Oxy will have to pull up it's pa-ties and be a real oil and gas company going forward...Good luck ;-)
As long as it makes for a tasty final acquisition price ... You brilliant minds apparently do not have the ability to move the stock price with your mental gymnastics ...All bark, no bite.
10 billion intuitively seems like a fair price extrapolating and discounting the pretax numbers given in the post by @qf. Who needs negotiations when can get to the value on the lay-off site.
@q8 the free cash generated during that period is way way less than $5 billion. You need a finance 101 refresher course.
@qc Oxy projects OxyChem will have ~$850 million of pretax profits this year, down from $1.1 billion in 2024 and $1.5 billion in 2023. EBITA for 2025 is ~$1.2 billion. You can’t evaluate a company based on just revenue. In fact a company could have $5 billion in revenue and still be losing money. That’s not to say that revenue is irrelevant. But it’s not a big part of the calculation for determining market value.
You have to at least look at basic operating costs and deduct that from revenue. Unless the 5 billion is net revenue.
Revenue June 2024 thru June 2025 is about 5 billion dollars. It is a cash generating cow. Why ki-l a sacred cow when you could unload useless baggage. International, DAC….
@q1 Wrong answer. Go back and look up the difference between revenue and net income and then come back and try again.
Oxy chemicals generates around 5 billion dollars a year .... 10 billion dollars is two years of earnings?... That's a extra special cash cow you are taking to sla-ghter just to "streamline" operations. More likely the sale is to pay down debt and put lipstick on the pig for an ultimate corporate sale.
@p2 I think it’s a little too early to say the two companies are going to combine into one company. It may happen, but then again, maybe not. I think you could be right about retirements. If I were retirement age or close to it, and had enough years to qualify for retiree benefits, I would keep my eyes open. Expect retention bonuses offered and a lot of unique arrangements being suggested.
Are international cash cows next? There are a few out there to be harvested.
@p1 - yes, it is like selling your house. To pay off your credit card! OxyChem is a cash cow. Vicki is eating the goose that has been laying golden eggs.
@ae To those who are saying that this will be good for OxyChem or their employees, I couldn’t disagree more. Lubrizol benefits are worse across the board. Most importantly, they have no retiree medical benefits. A lot of older OxyChem employees are going to be suddenly announcing retirement in the next few weeks. As for the businesses, there is no natural synergy - this is a forced marriage.
This is a great opportunity to monetize an asset. It is just like someone offering to buy your house or car that otherwise couldn’t be sold easily and for a good price. It is likely a cash deal and you can’t beat that.
Is this deal for paying off the preferred stocks which is around 8.2B?
@kp thanks for the lol moment.
@kz Good grief. Read the articles already. OPC wants to pay down debt. The 8% preferred dividend deal is in tact.
@kc No, BH is not reducing its ownership of OPC. Read the articles.
@js No, this is not like CRC. CRC was not purchased.
@kz No tall boys allowed for purchase?
Wasn’t OxyChem returning more than 8% on the money? If so this deal makes no sense at all. Unless the 10 billion from the sale will be used to purchase something else. What about buying a gasoline retailer. Let’s go fill up our cars at the Oxy station and get a hot dog and a soda at the same time.
Only VH could turn a $10B loan into a $10B sale — both to the same guy. That’s not corporate strategy, that’s Buffett’s version of a buy-one-get-one.
@kd DAC is under One Point Five. OxyChem runs & operates the site. Wonder how that side of the business will be impacted?
DAC is not under OxyChem.
Good for Oxychem and their employees. It would be nice to be a private company, and especially one under Berkshire that has a 300 billion dollar cash pile. Maybe Oxy just swaps Oxychem to clear the preferred stock owed Berkshire. If this goes through Oxy oil and gas might look pretty attractive to a buyer. If I am not mistaken I think DAC is under Oxychem as well, but I could be wrong on that.
OxyChem - A Berkshire Hathaway Company or does he merge OxyChem with Lubrizol?
Warren Buffet. Google it, just posted.
If it is spun off would shareholders of Oxy be issued stock for the new company like in the case of CRC?
My guess is the chemical division will be spun off into its own company. I don’t see another chemical company buying it at this time. My question is will RP go with it to run it as CEO, or will VH try to keep him around as a possible successor. I think the former. Interesting times.
Good for OxyChem. Maybe they will be appreciated now. They fit well and were appreciated by Irani who was technically very smart and knew chemistry and chemical engineering. His president DL was also a highly technical chemical engineer by training. The next two leaders have no expertise in the chemical business. So good for OxyChem to get out from under Oxy.
Lubrizol used to be a great specialty chemical company from ohio. If they are the same quality company as they were back in the 70’s they would be a great choice to buy OxyChem.