Warren Buffett’s Berkshire Hathaway - which we have been following and watching take, then increase its stake in Occidential Petroleum for years - has finally tipped its hand at what it's end game with the company could be.

While many had speculated Buffett would eventually take all of Occidental private, Berkshire is instead in advanced talks to buy Occidental's petrochemical business, OxyChem, for about $10 billion, according to the Wall Street Journal.

A deal could be finalized within days and would mark Berkshire’s largest acquisition since 2022.

Occidental, best known for its oil-and-gas operations, is valued at roughly $46 billion and already counts Berkshire as its biggest shareholder. OxyChem, which makes chemicals used in water treatment, battery recycling, and paper production, generated nearly $5 billion in sales in the year through June.

WSJ writes that if completed, this would be Buffett’s second major chemicals bet. Back in 2011, Berkshire purchased Lubrizol for close to $10 billion. His last large deal was the $11.6 billion takeover of insurer Alleghany in 2022.

Buffett’s ties to Occidental date to 2019, when he invested $10 billion in preferred shares to help CEO Vicki Hollub outbid Chevron for Anadarko. While that transaction burdened Occidental with debt and drew fire from Carl Icahn, Buffett steadily accumulated shares and now owns about 28% of the company. Occidental has since been selling assets and repaid $7.5 billion of debt as of August.

Meanwhile, Berkshire is flush with a record $344 billion in cash and Treasurys. As Buffett put it earlier this year: “Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.”

Energy assets, especially in oil and gas, still look cheap in today’s market and continue to believe relatively unloved as the market continues its focus on tech and AI. We wouldn’t be surprised to see more take-private or merger activity follow this deal.