Berkshire Hathaway To Invest $10 Bln In Occidental For Anadarko Takeover

(RTTNews) - Occidental Petroleum Corp. (OXY) said Tuesday that billionaire investor Warren Buffett's Berkshire Hathaway, Inc. (BRK-B, BRK-A, BRKa) has committed to invest $10 billion in the company to help finance Occidental's acquisition of Anadarko Petroleum Corp. (APC).

The investment is contingent upon Occidental entering into and completing its proposed acquisition of Anadarko, which is fielding competing takeover bids from Occidental and oil giant Chevron Corp. (CVX).

Berkshire Hathaway will receive 100,000 shares of cumulative perpetual preferred stock with a liquidation value of $100,000 a share, together with a warrant to buy up to 80.0 million shares of Occidental common stock at an exercise price of $62.50 per share, Occidental noted. The preferred stock will accrue dividends at 8 percent per annum.

The preferred stock to be issued to Berkshire Hathaway will be redeemable for cash at the option of Occidental, commencing on the tenth anniversary of issuance. The redemption price will be equal to 105 percent of the liquidation preference plus accumulated and unpaid dividends, if any.

"We are thrilled to have Berkshire Hathaway's financial support of this exciting opportunity. We look forward to engaging with Anadarko's Board of Directors to deliver this superior transaction to our respective shareholders," said Vicki Hollub, President and Chief Executive Officer of Occidental.

Last week, Occidental made a proposal in cash and stock to acquire Anadarko for $76 per share, comprised of $38.00 in cash and 0.6094 shares of Occidental common stock for each Anadarko share. The transaction is valued at $57 billion.

Occidental's bid came after Chevron said in mid-April that it would acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33 billion, or $65 per share.

However, Anadarko said Monday it has determined that the proposal from Occidental could reasonably be expected to result in a "superior proposal" under its existing merger agreement and that it would engage with Occidental.