Buffett’s Berkshire edges closer to 20% Occidental stake

July 19 (Reuters) – Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) bought one other 1.94 million shares of Occidental Petroleum Corp (OXY.N), giving it an $11.4 billion stake and placing it nearer a threshold the place it may document among the oil firm’s earnings with its personal.

Berkshire’s newest purchases from July 14 to July 18 price $112 million, and gave Buffett’s conglomerate a 19.4% stake in Occidental, or 181.7 million shares, regulatory filings present.

If it reached 20% possession, Berkshire may report its proportionate share of Houston-based Occidental’s earnings, via the so-called fairness technique of accounting, probably including billions of {dollars} to annual revenue.

Analysts on common count on Occidental to submit about $10.7 billion of web revenue this yr, in line with Refinitiv I/B/E/S.

Occidental shares closed up 4.6% at $62.82 on Tuesday. The share worth has greater than doubled this yr, benefiting from rising oil costs following Russia’s invasion of Ukraine.

Omaha, Nebraska-based Berkshire additionally has warrants to purchase one other 83.9 million Occidental shares for $5 billion.

It additionally owns $10 billion of Occidental most well-liked inventory, which helped finance the 2019 buy of Anadarko Petroleum and generates $800 million of annual dividends.

Berkshire makes use of the fairness technique of accounting for its 26.6% stake in packaged meals firm Kraft Heinz Co (KHC.O), which it controls with Brazilian non-public fairness agency 3G Capital.

Although some analysts and buyers have speculated that Berkshire may finally purchase all of Occidental, Berkshire may contend that its accounting ought to stay unchanged as a result of its stake is passive. learn extra

Berkshire additionally owns dozens of firms, together with the BNSF railroad, Geico automobile insurance coverage and a number of other power firms, and shares together with Apple Inc (AAPL.O), Financial institution of America Corp and one other oil firm, Chevron Corp (CVX.N).

Reporting by Jonathan Stempel in New York; Modifying by Matthew Lewis and Jonathan Oatis

: .