Warren Buffett’s shrewd dealmaking instincts remain intact even as the 95-year-old legendary investor inches close to the end of his term as Berkshire Hathaway CEO. Berkshire said Thursday it reached a deal to buy Occidental Petroleum’s chemical business, OxyChem, for $9.7 billion in cash, marking its largest purchase since 2022. The transaction reflects Buffett’s investment acumen: buying a good business at an attractive price, while skirting the possibility of costly headaches. Occidental, burdened with billions of dollars in debt on its balance sheet, was motivated to sell and agreed to part ways with OxyChem at a time when chemical markets are near the bottom of their cycle. “One of the key tradeoffs was timing, as OXY is selling OxyChem at below mid-cycle cyclical conditions for chemicals,” analysts at JPMorgan said. Meanwhile, the market may not have anticipated one key wrinkle: Occidental will keep OxyChem’s environmental liabilities, which total $1.9 billion, according to its latest securities filing. “OXY is retaining ~$1.9 billion of environmental remediation liabilities (as of YE24) which is a risk to future cash flows if the actual cost of remediation exceeds the current assessed value,” Mizuho said in a research note. Occidental will also forgo a free cash flow windfall that’s projected to result from the expansion of OxyChem’s Battleground plant in 2026, JPMorgan added. The Wall Street firm estimates the expansion could have lifted Occidental’s cash flow by $460 million annually starting that year. Factoring in roughly $1.7 billion in tax leakage, the after-tax value of the sale is closer to $8 billion, JPMorgan said. OXY 5D mountain Occidental Petroleum over the past 5 days The terms of the deal are probably why shares of Occidental tumbled more than 7% the day the takeover was announced on Thursday. Buffett first got involved with Occidental in 2019 when he helped bankroll Occidental’s purchase of Anadarko Petroleum with a $10 billion commitment. He received preferred shares and warrants to buy more common stock in return. In early 2022, the billionaire investor started buying Occidental common stock on the open market, eventually amassing a 28.2% stake by the end of June this year and becoming the energy giant’s biggest shareholder. Occidental currently pays an 8% dividend on Berkshire’s preferred stake and a 2.1% dividend yield on its common stock at current prices, giving Buffett significant payouts even before the OxyChem purchase. Occidental CEO Vicki Hollub said as Occidental grows its cash holdings, it will start redeeming Berkshire’s preferred stock in 2029. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )