Buffett's Berkshire Hathaway gets regulator nod to buy 50% Occidental stake

A US energy regulator on Friday gave Berkshire Hathaway Inc, the company controlled by billionaire Warren Buffett, permission to buy up to 50 percent of oil company Occidental Petroleum Corp's common stock.

Occidental's share price soared 9.9 percent, closing up $6.41 at $71.29, after the Federal Energy Regulatory Commission (FERC) said letting Berkshire add to its 20.2 percent stake was "consistent with the public interest."

The share price of Houston-based Occidental has more than doubled this year, benefiting from rising oil prices following Russia's Feb. 24 invasion of Ukraine. Berkshire began buying Occidental shares four days later.

Smead, in contrast, said Buffett is unlikely to buy all of Occidental soon, and can instead buy more shares on the open market at lower prices than in a full takeover.

"In the long run, he may, but you don't file something like this with FERC if you're planning it in the next six months," Smead said.

Berkshire ended June with $105.4 billion of cash and equivalents, even after buying a net $45.2 billion of stocks in the year's first half.

Buffett has pledged to keep $30 billion on hand. Occidental's market value was about $66 billion after Friday's run-up.

Berkshire owns more than 90 companies outright, including Geico car insurance, See's Candies, Dairy Queen ice cream, and several manufacturing businesses.

At Berkshire's annual meeting on April 30, Buffett said he began buying Occidental shares after reviewing an analyst presentation. He also expressed confidence in Chief Executive Vicki Hollub, who has been reducing Occidental's debt. "She says she doesn't know the price of oil next year. Nobody does," Buffett said. "But we decided it made sense."