(MENAFN- Trend News Agency)
Warren Buffett's Berkshire Hathaway Inc bought more shares of
Occidental Petroleum Corp, surpassing the 20% stake where it could
record some of the oil company's earnings with its own and
potentially add billions of dollars of profit, Trend reports with reference
to Reuters .
In a regulatory filing on Monday night, Berkshire said it paid
about $391 million for nearly 6.7 million Occidental shares between
Aug. 4 and Aug. 8.
The purchases gave Berkshire 188.4 million Occidental shares, or
20.2% of reported shares outstanding, worth $11.3 billion.
A 20% stake would let Berkshire report its proportionate share
of Houston-based Occidental's earnings with operating results,
through the so-called equity method of accounting.
Berkshire nonetheless could contend that its accounting for
Occidental should remain unchanged because its stake is
Analysts on average expect Occidental to generate $10.5 billion
of profit this year, according to Refinitiv I/B/E/S.
Buffett's company also owns $10 billion of Occidental preferred
stock, which helped finance the 2019 purchase of Anadarko
Petroleum, and has warrants to buy another 83.9 million common
shares for $5 billion.
Some analysts have speculated that Omaha, Nebraska-based
Berkshire could eventually bid for all of Occidental.
Buffett's assistant and Occidental did not immediately respond
to a request for comment outside market hours.
Berkshire generated $16.3 billion of operating profit in this
year's first half.
It uses the equity method of accounting for food company Kraft
Heinz Co, where it has a 26.6% stake, and truck stop operator Pilot
Travel Centers, where its 38.6% stake is expected to grow to 80%
In contrast, Berkshire accounts normally for its 20.2% stake in
American Express Co, restricting its ability to exercise
Berkshire owns dozens of companies including the BNSF railroad,
Geico car insurance and several energy businesses, and stocks
including oil company Chevron Corp, where it ended June with a
$23.7 billion stake.
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