Berkshire To Make $10 Billion Investment In Occidental To Finance Anadarko Bid -- 2nd Update

By Micah Maidenberg 

Berkshire Hathaway Inc. agreed to make a $10 billion equity investment in Occidental Petroleum Corp. in a bid to help the oil company fight off Chevron Corp. in the pursuit of Anadarko Petroleum Corp.

Last week, Houston-based Occidental offered to purchase Anadarko for $38 billion, topping the $33 billion that Chevron agreed to pay to buy the company. Anadarko has said it is considering Occidental's offer.

The backing by Warren Buffett's Berkshire Hathaway gives Occidental more ammunition to fight the much-larger Chevron. The two sides are fighting over prized assets in the heart of the U.S. fracking boom.

"We are thrilled to have Berkshire Hathaway's financial support of this exciting opportunity," Occidental Chief Executive Officer Vicki Hollub said in prepared remarks.

In return for the investment, which is contingent on the Occidental completing the Anadarko deal, Berkshire will receive 100,000 shares of preferred stock, according to a statement from Occidental. The preferred stock will generate dividends at 8% a year.

In addition, Bekrshire will receive a warrant to buy up to 80 million shares of Occidental common stock at a price of $62.50 a share.

Shares of Occidental closed Monday at $60.13.

Berkshire couldn't immediately be reached for comment. Berkshire will only follow through on the investment if Occidental is able to enter into and complete its proposed acquisition of Anadarko.

Monday, a Chevron spokesman said in a statement the company believes its agreement offers Anadarko the best value and most certainty to Anadarko shareholders.

Write to Micah Maidenberg at [e-mail]

(END) Dow Jones Newswires

April 30, 2019 10:27 ET (14:27 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.