Berkshire Hathaway Inc. (NYSE: BRK.B) surges over 1.4% in pre trading session on Monday as the On Saturday, Warren Buffett stated that Berkshire Hathaway Inc. does not intend to purchase Occidental Petroleum Corp but is satisfied with its significant stake in the oil business.
Buffett denied concerns that Berkshire might purchase Occidental after accumulating a 23.6% stake during the company’s annual shareholder meeting.
“We will not make any bid for Occidental,” Buffett stated. “We have the right management in place.”
Occidental did not reply quickly to a request for comment.
According to analysts and investors, the acquisition might diversify Berkshire’s energy portfolio, which already comprises various utilities, electricity distributors, and renewable energy projects.
Berkshire began purchasing Occidental stock in February 2022, just as Russia invaded Ukraine.
Buffett has also maintained a tight connection with Occidental CEO Vicki Hollub, who has been reducing debt and repaying money to shareholders since the company’s acquisition of Anadarko Petroleum Corp in 2019.
“Hollub is an extraordinary manager at Occidental,” stated Buffett. “We love having Vicki run it.”
Occidental and Chevron Corp, another substantial Berkshire holding, both have significant presences in the Permian Basin, a region in Texas and New Mexico that accounts for a sizable portion of US petroleum output.
Berkshire Hathaway finished March with $21.6 billion in Chevron shares, while it looked to sell nearly $6 billion in the first quarter, according to Edward Jones & Co analyst Jim Shanahan.
Until recently, Berkshire had $10 billion in Occidental preferred stock with an 8% dividend, which helped fund the Anadarko acquisition, as well as rights to purchase another $5 billion in common stock at $59.62 per share.
Berkshire announced on Saturday that Occidental redeemed around $474 million of preferred shares at a premium, as it was entitled to do, decreasing dividend distributions.
Berkshire received clearance from the US Federal Energy Regulatory Commission in August to purchase up to 50% of Occidental’s ordinary shares.
It required the authorization because exercising the warrants would have exceeded the Federal Energy Regulatory Commission’s 25% ownership restriction.
Buffett, 92, has yearned for another huge purchase for his Omaha, Nebraska-based conglomerate, which owns Geico auto insurance and the BNSF railroad, among other enterprises.
Berkshire owned 22.6% of BNSF before spending $26.5 billion for the rest in 2010.
