Dubbed as one of the most reputable and popular investors, Warren E. Buffet pledged to help Occidental Petroleum bid for Anadarko Petroleum Corp. Following this news, the business magnate decided to show his support by investing a whopping $10 billion via Berkshire Hathaway Inc.
According to Bloomberg, Occidental Petroleum Corp. plans to make a bid of $38 billion for the said company.
What’s at Stake
Getting the Anadarko Petroleum Corp. means having power and control of the Permian Basin, cites The New York Times. With the Permian Basin considered as the world’s richest and most productive oil field, it is expected to produce tons of oil and petroleum. The Permian Basin reportedly covers the state of Texas and New Mexico.
Should Occidental gain win the bid, Warren Buffet’s Berkshire Hathaway Inc. will be receiving shares of stocks amount to 100,000. Bloomberg states that the 100,000 shares will grow about 8 percent a year. A similar structure was also set in place by Buffet to help gain stock from Bank of America and Goldman Sachs.
Making a Claim
Occidental is not the only company interested in bidding for Anadarko. Chevron has also proposed to buy the company for $33 billion. The initial bid comes out to $65 per share reports CNBC. According to the news site, a number of analysts predicted that Chevron proposal would mean fewer risks for Anadarko, with the bidding party already being established in the business.
However, with the $5 billion increase in Occidental’s proposal, it appears that Chevron’s bid for the said company is already obsolete. The $76 per share already overshadows the initial offer of Chevron of $65.
Despite being four times smaller than Chevron, Occidental hopes that with Warren’s help and reputation in the industry, they would be able to win the bidding war.
