The FERC approval follows Berkshire Hathaway’s acquisition representing more than a 20% of Occidental Petroleum shares, as announced in its regulatory filing earlier this month
Berkshire’s corporate offices in Omaha, Nebraska. (Credit: JonClee86/Wikipedia)
Berkshire Hathaway, the company controlled by investor Warren Buffett, is set to acquire up to 50% of US hydrocarbon exploration company Occidental Petroleum.
The US Federal Energy Regulatory Commission (FERC) has granted the necessary regulatory permission for the acquisition.
FERC is a federal agency that regulates the transmission and sale of electricity and natural gas, and regulates the interstate transportation of oil in the US.
The move follows Berkshire Hathaway’s acquisition representing more than a 20% of Occidental Petroleum shares, as announced in its regulatory filing earlier this month.
According to the filing, the company acquired nearly 6.7 million Occidental shares between 4th and 8th August, in exchange for around $391m.
Last month, Berkshire Hathaway has requested the US regulatory agency authorisation to acquire up to 50% of Occidental Petroleum, in secondary market transactions.
The company said that the acquisition would not affect the competition, regulatory authority, or increase costs for consumers, reported Reuters.
FERC has now approved Berkshire Hathaway’s request to acquire 50% of Occidental Petroleum
Smead Capital Management president Cole Smead told Reuters: “Buffett is taking advantage of stock market participants who are foolish about the oil and gas industry and consider it a dead business. Buffett thinks it can make him wealthy.”
Smead Capital Management owns Occidental and Berkshire shares.
According to Reuters, Berkshire Hathaway also owns Occidental preferred stock worth $10bn, which supported the acquisition of Anadarko Petroleum in 2019, and has warrants to buy additional 83.9 million common shares for $5bn.