Warren Buffett's Berkshire Hathaway has continued to expand its stake in Houston oil and gas producer Occidental Petroleum, now owning nearly 29% of the company. This after nine consecutive trading sessions of buying additional shares, totaling 7.3 million additional shares. Acquisition prices were around $60 per share, bringing Berkshire's total holdings to more than 255 million shares. This makes Berkshire Hathaway the largest institutional investor in Occidental Petroleum.
In addition to its common stock, Berkshire also owns $10 billion of Occidental preferred stock and has warrants to acquire an additional 83.9 million common shares for $5 billion. Those warrants were acquired during a 2019 deal that helped finance Occidental's acquisition of Anadarko Petroleum. If Berkshire fully repaid the preferred stock, its ownership of Occidental could exceed 40%.
Despite the possibility of a takeover, Buffett has said he does not intend to take full control of the oil company. This comes after Berkshire received regulatory approval to buy up to a 50% stake in Occidental. Buffett's interest in the company was piqued after reading a transcript of an earnings conference call. He praised Occidental CEO Vicki Hollub for her management of the company, which also offers a 1.5% dividend yield.
Buffett has previously taken advantage of market volatility to make major acquisitions. In early 2022, it acquired a 14% stake in the energy company, valued at more than $7 billion, in a two-week period. Despite a 5% drop in 2023, Occidental's stock has remained relatively flat this year. Buffett likened the acquisition process to buying a significant portion of any major American company, comparing them to “poker chips.”
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