Buffett's Berkshire Hathaway to invest $10B in Occidental Petroleum for bidding war

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Warren Buffett’s sprawling Berkshire Hathaway on Tuesday said it plans to invest $10 billion in Occidental Petroleum Corp., contingent upon the company completing its proposed takeover of Anadarko Petroleum.

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In exchange, Berkshire Hathaway will receive 100,000 shares of cumulative perpetual preferred stock with a value of $100,000 per share. It will also get a warrant to purchase up to 80 million shares of Occidental common stock, at $62.50 per share.

“We have long believed that Occidental is uniquely positioned to generate compelling value from Anadarko’s highly complementary asset portfolio. We are thrilled to have Berkshire Hathaway’s financial support of this exciting opportunity,” Vicki Hollub, president and CEO of Occidental, said in a statement.

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On Monday, Anadarko Petroleum Corp. resumed its merger talks with Occidental, following the company’s rival $38 million bid for the oil and gas driller, just a few weeks after it agreed to a separate $33 billion takeover deal from Chevron Corp.

Anadarko said in a statement that it reignited discussions because Occidental because, under the agreement with Chevron, it could be constituted as a “superior proposal.”

“The Occidental proposal reflects significant improvement with respect to indicative value, terms and conditions, and closing certainty as compared to any previous proposal Occidental made to Anadarko,” the company said.

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If the Chevron deal falls through, Occidental will be required to pay a $1 billion fine.

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