Berkshire To Make $10 Billion Investment In Occidental To Finance Anadarko Bid -- 2nd Update
01 May 2019 - 12:42AM
Dow Jones News
By Micah Maidenberg
Berkshire Hathaway Inc. agreed to make a $10 billion equity
investment in Occidental Petroleum Corp. in a bid to help the oil
company fight off Chevron Corp. in the pursuit of Anadarko
Petroleum Corp.
Last week, Houston-based Occidental offered to purchase Anadarko
for $38 billion, topping the $33 billion that Chevron agreed to pay
to buy the company. Anadarko has said it is considering
Occidental's offer.
The backing by Warren Buffett's Berkshire Hathaway gives
Occidental more ammunition to fight the much-larger Chevron. The
two sides are fighting over prized assets in the heart of the U.S.
fracking boom.
"We are thrilled to have Berkshire Hathaway's financial support
of this exciting opportunity," Occidental Chief Executive Officer
Vicki Hollub said in prepared remarks.
In return for the investment, which is contingent on the
Occidental completing the Anadarko deal, Berkshire will receive
100,000 shares of preferred stock, according to a statement from
Occidental. The preferred stock will generate dividends at 8% a
year.
In addition, Bekrshire will receive a warrant to buy up to 80
million shares of Occidental common stock at a price of $62.50 a
share.
Shares of Occidental closed Monday at $60.13.
Berkshire couldn't immediately be reached for comment. Berkshire
will only follow through on the investment if Occidental is able to
enter into and complete its proposed acquisition of Anadarko.
Monday, a Chevron spokesman said in a statement the company
believes its agreement offers Anadarko the best value and most
certainty to Anadarko shareholders.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
April 30, 2019 10:27 ET (14:27 GMT)
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