Archive · 27 Oct 2025
Berkshire's Lubrizol Deal a Bust, OxyChem Deal May Succeed
Imagine a smart investor named Berkshire Hathaway.
They bought a chemicals company called Lubrizol in 2011.
Unfortunately, Lubrizol hasn't made much money since then, like the investment didn't work out very well.
The company made a new deal to purchase OxyChem’s chemicals business.
The first deal was a disappointment, especially compared to what they could have made if they'd invested the money in a broad stock market fund.
The new deal might be better because the market conditions could be improving.
Investing in chemicals has been tricky, with tough competition.
Hopefully, the second deal goes better.
Berkshire Hathaway's 2011 acquisition of Lubrizol hasn't performed well, with revenues increasing less than 20% since 2010.
Lubrizol’s pretax profits have remained stable around $1 billion, and this year's earnings were down more than 15% in the first half.
Investing in the S&P 500 would have yielded much better returns than the Lubrizol investment.
The chemical industry has faced challenges, including overcapacity and incidents at Lubrizol facilities.
Berkshire's purchase of OxyChem is viewed as potentially more successful, costing a reasonable price.
- Who
- Berkshire Hathaway, Lubrizol, and Occidental Petroleum
- What
- Assessing Berkshire Hathaway's chemical industry investments, particularly the performance of its Lubrizol acquisition and the potential of the OxyChem purchase.
- When
- Since 2011.
- Where
- N/A
- Why
- To evaluate the success of Berkshire Hathaway's ventures in the chemical industry.
- Company
- Berkshire Hathaway
- First Chemical Deal
- Lubrizol (2011)
- Lubrizol Purchase Price
- $9.7 billion
- Lubrizol Revenue Growth Since 2010
- Less than 20%
- OxyChem Deal Price
- $9.7 billion