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His last big deal as Berkshire CEO before Abel takes over?

(This Warren Buffett Watch Bulletin, Warren Buffett and Berkshire Hathaway news and analysis about everything. Here To get it in your box every Friday evening.)

Buffett was seen as the ‘winner’ in his last major purchase as CEO

A screen displays Occidental oil trade information at the New York Stock Exchange (NYSE) in New York, New York, New York, New York, New York.

Brendan McDermid | Reuters

The agreement is already based on a close relationship between companies: Berkshire Occidental’s largest shareholder is now worth $ 11.9 billion with a 27% share.

In addition, Occidental pays more than $ 8 billion dividends in the preferred shares held by Berkshire, a loan that will help Oxy to acquire Oxy in 2019.

As part of this agreement, Berkshire now has the warrants of buying approximately 84 million additional oxy -common shares under a slightly 60 dollar per share.

Despite these ties, Buffett told the shareholders two years ago Berkshire will not try to completely acquire Occidental.

In a live interview of CNBC’s “Squawk Box”, CEO Vick Hollub said that he would use the $ 6.5 billion Oxychem purchasing price to reduce his debt, and that he would bring the Permiyan Basin Crownrock Crownrock for $ 12 billion in the late 2023.

“Now we will be able to start our share reputation program again …

“What we had to do was to improve our balance sheet. This is the last big step we need, and now we are trying to create a future value for our shareholders.”

Wall Street is not positive about the Hollub agreement.

Occidental oil shares fell by 8.1% on the day of the announcement on Thursday, but returned a little to close the week with a 5.5% drop.

Barron blunt In his assessment: “One point for Warren Buffett at the expense of Vicki Hollub, CEO of Occidental Petroleum.”

He says that the purchasing price may be a bargaining because the gains in the sector are depressed this year “and Is expected to go high.

In addition, Occidental will lose a chemical job that helps to distinguish it from energy competitors.

Berkshire, as some predicted, would face a tax hit of $ 1.7 billion to be eliminated if Oxy had used its preferred shares to pay for an agreement.

This means that Occidental will probably continue to pay more than $ 600 million every year until it is planned to be used in 2029 in Berkshire.

Luck, on the other hand, Emphasizes the benefits of Occidental Reduce the debt burden.

Wolfe Research Analyst Doug Leggate calls the agreement as a earning plus for “Berkshire” because it also helps the company they have [roughly] 30 %. It serves completely by itself, logical and-any traitor not in a way-is often useful. “

Berkshire played Greg Abel in this way NEWS BULLETIN OF THE TARGET Interestingly, this never mentioned Buffett’s name.

“Vicki and Occidental team, the company’s balance sheet to strengthen the balance of revenues to use the plans to use Revenues, we appreciate Occidental’s commitment to long -term financial stability.”