Occidental Petroleum Corp. has received an equity commitment of $10 billion from Berkshire Hathaway Inc. to finance its proposed acquisition of Anadarko Petroleum Corp.
In return, Berkshire Hathaway will receive 100,000 shares of cumulative perpetual preferred stock with a value of $100,000 per share and a warrant to purchase up to 80 million shares of Occidental common stock at an exercise price of $62.50 per share. The preferred stock will accrue dividends at an annual rate of 8% (or with respect to dividends that are accrued and unpaid, 9%).
On April 24, Occidental made a proposal to acquire Anadarko for $76.00 per share, comprised of $38.00 in cash and 0.6094 shares of Occidental common stock per Anadarko share, countering a bid made by Chevron Corp. (OGJ Online, Apr. 12, 2019; Apr. 24, 2019). Anadarko’s board determined that Occidental’s proposal could reasonably be expected to result in a superior proposal and agreed to engage in continued negotiations.
Financing is contingent upon Occidental entering into and completing the deal with Anadarko.