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 a battle to buy Anadarko's prized assets in West Texas' huge Permian shale oil field, the biggest oil-industry takeover in years.
On Monday, Anadarko agreed to start negotiations with Occidental over a bid that valued the company at $38 billion in cash and stock, compared to Chevron's offer of $33 billion.
"We are thrilled to have Berkshire Hathaway's financial support on this exciting opportunity," Occidental Chief Executive Officer Vicki Hollub said.
The investment is contingent upon Occidental entering into a deal with Anadarko and completing its proposed acquisition.
Berkshire Hathaway will get 100,000 preferred shares and a warrant to purchase up to 80 million shares of Occidental at $62.50 apiece in a private offering, Occidental said.
Shares of Occidental were down 3% at $59.20 in premarket trading, while Chevron shares were up 2% at $120.30.
Anadarko shares were down about 2%.
Occidental and Chevron, two of the largest oil and gas producers in the Permian by production volumes, argue they can best squeeze more oil from Anadarko's 240,000 acres in the area.
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