As per reports, Berkshire Hathaway has received approval from a regulator to proceed with the acquisition of a stake in Occidental Petroleum.
Berkshire Hathaway gets Approval
The reports confirm that Berkshire Hathaway has received approval from the US energy regulator to acquire a stake in Occidental Petroleum.
It was on Friday when Berkshire Hathaway received approval from the US energy regulator. With the approval, Berkshire Hathaway will be able to acquire up to a 50% stake at Occidental Petroleum.
According to sources, Occidental Petroleum is an oil company and Berkshire Hathaway will be able to acquire common stock for the oil corporation.
Occidental Petroleum’s Shares Jumped Higher
Right after the announcement, the share prices for Occidental Petroleum experienced a significant jump. The data suggests that the trading price of the energy company has surged 9.9% following the announcement.
In terms of figures, the share prices of Occidental Petroleum added $6.41 per share. At the time of writing, the share prices for Occidental Petroleum are at a high of $71.29.
Energy Regulator’s Remarks
The regulatory authority that allowed Berkshire Hathaway to acquire Occidental Petroleum’s stake is the Federal Energy Regulatory Commission (FERC).
It is to be noted that Berkshire Hathaway has already acquired a 20.2% stake in Occidental Petroleum. As per the FERC, it would be consistent for Berkshire and for the interest of the investors to let it add to its stake.
Berkshire Applied for Stake Increment in July
Having acquired a 20.2% stake in Occidental Petroleum, Berkshire Hathaway had submitted a request for approval to acquire more stakes.
It was in the month of July when Berkshire Hathaway applied to acquire more stakes in Occidental Petroleum. It had submitted a request to the Federal Energy Regulatory Commission to acquire more stake in Occidental Petroleum.
Berkshire’s Claim in the Filing
As Berkshire Hathaway submitted the request, it claimed that its stake acquisition would not boost costs for consumers, undermine regulatory authority, or hurt competition in the market.
Share Price Condition of Occidental Petroleum
Occidental Petroleum’s shares have been performing really well in the market lately. In the running year alone, Occidental Petroleum’s share prices have doubled themselves, which is quite remarkable.
The company has gained tremendously from the rising oil prices. So far, market conditions post-pandemic supply chain disruptions and the Russia-Ukraine war crisis have worked in favor of Occidental Petroleum.
As the oil prices started to rise in Feb due to the Russia-Ukraine war, Berkshire went on a shares buying spree.
Current Occidental Stake Held by Berkshire
So far, Berkshire Hathaway has acquired $10 billion worth of stake in Occidental Petroleum. Berkshire is aiming to buy more stocks at Occidental Petroleum.
This time, Berkshire is set to invest $5 billion to acquire 83.9 million common shares belonging to Occidental Petroleum.