Buffett’s Berkshire to invest $10bn in Occidental for Anadarko purchase

Warren Buffett’s Berkshire Hathaway Inc will put $10 billion behind Occidental Petroleum Corp’s bid as it tries to see off competition from Chevron Corp to buy smaller rival Anadarko Petroleum Corp.

Occidental and Chevron Corp are locked in the biggest oil-industry takeover in years as they eye Anadarko’s prized assets in West Texas’ huge Permian shale oil field.

Anadarko on Monday agreed to start negotiations with Occidental on its $38 billion cash-and-stock bid, compared with Chevron’s offer of $33 billion.

Analysts said Buffett’s seal of approval supports Occidental’s push to get the deal done but comes at a high cost.

Berkshire’s preferred stock will accrue dividends at 8 percent per annum, compared with about 5 percent yield on common equity and 4 percent on term debt, Tudor Pickering Holt analyst Matthew Portillo said.