Is Berkshire Strengthening Oil & Gas Business With OxyChem Buyout?

Berkshire Hathaway (BRK.B) is strengthening its oil and gas business by buying Occidental’s chemical business, OxyChem, for $9.7 billion in cash. OxyChem is a global manufacturer of commodity chemicals. As Berkshire already holds a good stake in Occidental, buying the chemical business seems prudent. The transaction is expected to be closed in the fourth quarter of 2025, pending approvals and other closing conditions.

OxyChem produces essential base chemicals and this exposure to essential chemical inputs offers resilience through industrial cycles. Berkshire has a compelling energy portfolio, including exposure to Occidental and Berkshire Hathaway Energy Company, a diversified energy company with a heightened focus on renewable energy. These offer steady cash flow, long-term capital growth and a hedge spanning the commodity and utility sectors. 

Berkshire Hathaway is a diversified conglomerate and one of the largest property and casualty insurers globally. Its non-insurance business provides stability to the company. Berkshire stays focused on growing its non-insurance business whenever an opportunity arises. 

Berkshire boasts an impressive acquisition portfolio. This conglomerate, with Warren Buffett at its helm, targets businesses with durable earnings power, strong returns on equity with modest debt and skilled management. With more than $344 billion in liquidity, Berkshire is well-positioned to deploy capital. Acquisitions have collectively fueled Berkshire’s growth by adding resilient cash-generating businesses, diversifying income streams and expanding its investment base.

What About BRK.B’s Competitors?

NextEra Energy NEE and Dominion Energy D are two other renewable-focused companies that give competition to Berkshire Hathaway Energy.

NextEra Energy is well-positioned in the renewable energy business, owing to early and aggressive investments in wind, solar and battery storage technologies. NextEra’s established renewable infrastructure places it ahead of competitors. This allows the company to tap into the rising demand for low-carbon energy.

Dominion plans to invest $50 billion in 2025-2029, with a long-term objective to add clean energy projects by 2036. The company aims for a 15% annual increase in the renewable energy capacity. Dominion also operates four nuclear power stations, which generate nearly 40% of its total production.

BRK.B’s Price Performance

Shares of BRK.B have gained 10.3% year to date, outperforming the industry.

BRK.B’s Expensive Valuation

BRK.B trades at a price-to-book value ratio of 1.61, above the industry average of 1.57. It carries a Value Score of D.

Estimate Movement for BRK.B

The Zacks Consensus Estimate for BRK.B’s third and fourth-quarter 2025 EPS has witnessed no movement over the past 30 days. The consensus estimate for full-year 2025 has moved 0.3% higher in the past 30 days but the same for 2026 EPS witnessed no movement over the same time frame.

The consensus estimates for BRK.B’s 2025 and 2026 revenues indicate year-over-year increases. While the consensus estimate for BRK.B’s 2025 EPS indicates a year-over-year decline, the same for 2026 suggests an increase.  

BRK.B stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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