Berkshire Hathaway bought more than 10 million shares of this company for a value of $588 million.
warren Buffettexecutive director of Berkshire Hathawaychose to acquire 10 million shares of a multinational company dedicated to search and exploitation of oil. The reasons for the tycoon’s decision and the impact it generated.
The company led by Buffett bought more than 10 million shares of Occidental Petroleum for a value of US$588 million. That way, increased its participation to 27% in a company that has a market capitalization of US$50.2 billion.
The purchase made by Berkshire occurred in multiple transactions, distributed among Monday, Tuesday and Wednesdayas revealed in a document sent to the Securities and Exchange Commission (SEC). Furthermore, due to its character as a reference, the decision made generated a confidence shock about the company that promoted a increase more than 3% in the next wheel to the purchases made by Buffett’s company.
warren-buffet.jpg
Depositphotos
On the other hand, the company based in Nebraska, United States, also has a option to obtain 83.8 million more titles of the oil company at a price of US$56.62 each one, which would give it a total value of US$4.7 billion. However, Buffett ruled out the option to buy Occidental Petroleum although it became the Berkshire’s sixth largest shareholding.
The reason that drove Buffett’s decision
The purchase of securities by Berkshire Hathaway it occurred after Occidental Petroleum will close the purchase of CrownRocka oil and gas producer based in Midland, in exchange for US$12,000 million. This acquisition will help Occidental improve its financial position, with a view to obtaining greater free cash flow on a diluted share basis.
In this context, it is speculated that this acquisition served for the magnate to expand his participation as a sign of trust.
The company expects to generate 1,000 million dollars in the first year after the acquisition, based on a reference price of US$70 per barrel of WTI crude oil.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
