Warren Buffet’s Berkshire Hathaway Commits $10 Billion to Back Occidental to Acquire Anadarko
Posted on 04/30/2019
Billionaire Warren Buffett’s Berkshire Hathaway committed to a US$ 10 billion preferred stock investment in Occidental Petroleum Corporation that is contingent on the oil giant buying Anadarko Petroleum. In the private offering, the preferred stock will accrue dividends at 8% annually. Berkshire Hathway would get 100,000 shares of cumulative perpetual preferred stock with a value of US$ 100,000 a share. In addition, Berkshire Hathway would receive a warrant to purchase up to 80 million shares of Occidental Petroleum at an exercise price of US$ 62.50 a share.
Occidental Petroleum made a rival bid for the oil and gas driller Anadarko, putting a competing bid against Chevron Corporation’s US$ 33 billion buyout offer.
On April 24 2019, Occidental Petroleum made a proposal to acquire Anadarko for US$ 76 per share, comprised of US$ 38 in cash and 0.6094 shares of Occidental common stock per Anadarko share. On April 29, 2019, Anadarko announced that its Board of Directors had determined that the proposal from Occidental could reasonably be expected to result in a Superior Proposal under its existing merger agreement and that it would engage with Occidental.
Buffett, known as the Oracle of Omaha, is a major investor in the fossil fuel sector, being a top shareholder in Phillips 66, an oil refiner, and Canada-based Suncor.