Oct. 2 (UPI) — Berkshire Hathaway will purchase Occidental’s chemical business, OxyChem, for $9.7 billion, the two companies announced Thursday.

Berkshire Hathaway and Occidental said they expect to close on the all-cash deal in the fourth quarter of 2025. It represents the largest deal by Berkshire Hathaway since 2022 when it purchased insurer Alleghany for $11.6 billion, CNBC reported.

As part of the deal, Occidental said it plans to use $6.5 billion to reduce its debt. The company hopes to hit a target of less than $15 billion in debt.

Vicki Holly, Occidental’s president and chief executive officer, said the deal “strengthens our financial position.”

“OxyChem has grown under Occidental into a well-run, safely operated business with best-in-class employees, and we are confident the business and those employees will continue to thrive under Berkshire Hathaway’s ownership,” she said in a statement.

Greg Abel, Berkshire’s vice chairman of non-insurance operations, said the purchase is another addition to the company’s “robust portfolio.”

“We look forward to welcoming OxyChem as an operating subsidiary within Berkshire,” he said. “We commend Vicki and the Occidental team for their commitment to Occidental’s long-term financial stability, as demonstrated by their plan to use proceeds to reinforce the company’s balance sheet.”