Buffett's $9.7B OxyChem Deal Months Before Retirement Safeguards His Sinking Oxy Common Stock Position

Berkshire Hathaway current sits on a $344 billion cash pile. (Credit: gatesfoundation.org)

On Thursday, Warren Buffett's Berkshire Hathaway (NYSE:BRK.A/BRK.B) said it will acquire Occidental Petroleum's (NYSE:OXY) petrochem unit OxyChem in a $9.7 billion (£7.2 billion) cash deal. OxyChem manufactures water treatment, health care, and other commercial chemicals. It comes at a time when Berkshire is sitting on $344 billion (£256 billion) cash pile.

Occidental said it will use $6.5 billion (£4.8 billion) of the proceeds to reduce debt and cut interest payments by almost 30%, which will enable the company to resume buying back stock.