Warren Buffett’s Berkshire Hathaway is financing a bid by Occidental Petroleum for Anadarko, potentially upending Chevron’s $33 billion offer for the energy company.
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Anadarko and Chevron signed a merger agreement earlier this month, but Anadarko Petroleum said Monday that it is now considering an offer from Occidental worth about $57 billion in cash and stock. Chevron’s offer would be worth about $50 billion by the same metric, including debt and book value of non-controlling interest.
Berkshire said Tuesday it will invest $10 billion in Occidental. It will receive 100,000 preferred shares plus a warrant to purchase up to 80 million shares of Occidental common stock at an exercise price of $62.50 each. The preferred stock will accrue dividends at 8% per year. Occidental shares traded at $58.46, down 2.7 percent, in premarket trading.
The investment is contingent on Occidental entering into and completing its proposed acquisition of Anadarko.
Berkshire Hathaway Inc., based in Omaha, Nebraska, owns a range of businesses including insurance, railroads, jewelry as well as major investments in American Express, IBM and Wells Fargo & Co.
