According to a late-Monday filing, Berkshire Hathaway (NYSE:BRK.B) currently controls just over 20% of Occidental Petroleum (NYSE:OXY), following over $400 million in recent stock acquisitions. With a 20.2% stake in Occidental Petroleum (NYSE:OXY), the company (NYSE:BRK.B) should be able to include a proportional amount of Occidental Petroleum’s (NYSE:OXY) earnings in its financial results, increasing annual revenues by approximately $2 billion on a current base of more than $30 billion.
This contrasts with Berkshire’s existing practice of just including Occidental’s dividends in its earnings. The dividend treatment applies to positions below 20%. Warren Buffett, the chief executive officer of the American multinational conglomerate (NYSE:BRK.B), has steadily accumulated Occidental (NYSE:OXY) stock this year, and the company (NYSE:BRK.B) currently owns 188.4 million shares of the domestic-focused oil and gas producer, whose earnings have increased in tandem with oil and gas prices. A Form 4 filing reveals that it (NYSE:BRK.B) acquired around 6,7 million shares between Thursday and Monday. As a 10% investor, Berkshire (NYSE:BRK.B) must file any changes to its position in Occidental (NYSE:OXY) within two working days.
Berkshire Hathaway Takes The Opportunity
BRK.A (NYSE:BRK.B) paid between $57 and $60 for Occidental’s fresh produce. Buffett has rarely spent more than $60 per share for Occidental (NYSE:OXY) stock this year, and he took advantage of this week’s selloff in oil sectors to acquire more shares. Occidental climbed 1.8% to $60.04 on Monday, while Berkshire’s Class A stock was relatively unchanged at $439,167.
Speculation persists that BRK.A (NYSE:BRK.B) may ultimately want to acquire the complete 80% of Occidental (NYSE:BRK.B), which might cost $60 billion at $80 per share. The conglomerate (NYSE:BRK.B) already possesses $10 billion worth of 8% preferred stock and warrants to purchase 83.9 million shares at $59.62 per share.
Warren Buffett, one of the world’s most successful investors, is a fan of Occidental’s CEO Vicki Hollub and favors U.S.-based businesses. Occidental (NYSE:BRK.B) is one of the leading domestic oil and gas producers.
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