Summary
Occidental Petroleum Corporation (OXY) has entered into a significant Securities Purchase Agreement with Berkshire Hathaway Inc. for a $10 billion cash financing transaction. This agreement is contingent upon Occidental's successful acquisition of Anadarko Petroleum Corporation. The financing comprises $10 billion in preferred stock and a warrant to purchase common stock, designed to bolster OXY's financial position in its pursuit of Anadarko. The terms of the preferred stock include an 8% dividend rate, with a potential increase to 9% under certain conditions, and redemption options for Occidental. The warrant provides Berkshire Hathaway with the right to acquire a substantial number of OXY common shares at a fixed price, subject to adjustments and potential stockholder approval requirements. This strategic move by Occidental highlights its commitment to the Anadarko acquisition and its proactive approach to securing the necessary capital.
Key Highlights
- 1Occidental Petroleum entered into a $10 billion Securities Purchase Agreement with Berkshire Hathaway Inc.
- 2The financing consists of $10 billion in Series A Cumulative Perpetual Preferred Stock and a warrant to purchase 80 million shares of Occidental's common stock.
- 3This financing is contingent upon Occidental successfully acquiring Anadarko Petroleum Corporation.
- 4The preferred stock carries an initial 8% annual dividend, which can increase to 9% if dividends are not paid.
- 5Berkshire Hathaway's warrant is exercisable at $62.50 per common share and has anti-dilution provisions.
- 6Occidental needs to obtain stockholder approval to issue the full amount of common shares under the warrant.
- 7Both the preferred stock and the warrant were issued in a private placement, not registered under the Securities Act of 1933.