Occidental Petroleum Corporation ( OXY ) shares are trading lower on Thursday. Berkshire Hathaway, Inc. ( BRK/A ) agreed to acquire its OxyChem business for $9.7 billion in an all-cash deal.

What To Know: Berkshire, which is Occidental's largest shareholder with an approximate stake of 28.2%, will absorb OxyChem as an operating subsidiary. The acquisition marks Berkshire's largest deal since its $11.6 billion purchase of Alleghany in 2022.

OxyChem produces chemicals such as chlorine, caustic soda and PVC — materials used in water treatment, pharmaceuticals and construction. The unit's steady demand makes it a relatively recession-resistant business.

OxyChem will become an operating subsidiary within Berkshire. Berkshire vice chairman Greg Abel, who is set to become CEO in 2026, said Berkshire is acquiring a “robust portfolio of operating assets, supported by an accomplished team.”

The transaction is expected to close in the fourth quarter. Occidental said it will use $6.5 billion of the proceeds to pay down debt. CEO Vicki Hollub said the debt reduction will allow the company to resume stock buybacks.

“This transaction strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the last decade,” Hollub said.

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OXY Price Action: At the time of writing, Occidental shares were down 6.18% at $44.77, according to data from Benzinga Pro.

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