Occidental Petroleum shares have risen over 1% premarket after reports emerged stating that the company is in advanced talks to sell its chemical division, OxyChem, for at least $10 billion.
Barclays said the potential divestment “would accelerate balance sheet normalization and position the company to increase cash returns.”
According to reports, Occidental is negotiating the sale, with an announcement likely in the coming weeks.
“This news follows our Outlook 2030 deep dive on OXY, where we highlighted balance sheet normalization as a central focus for the company,” Barclays said.
The bank noted that such a move would mark a “strategic change for OXY, but would clearly accelerate deleveraging and the transition to higher cash returns, developments we believe would be viewed positively by the market.”
OxyChem is among the world’s top producers of chlor-alkali, PVC, and caustic potash, as well as one of the largest sellers of caustic soda globally.
Barclays highlighted that management had previously emphasized OxyChem’s “stable cash flow and synergies with the company’s Direct Air Capture initiatives,” with CEO Vicki Hollub citing its role at a Barclays conference last year.
Financially, Barclays projects OxyChem’s EBITDA at about $1.24 billion in 2025, rising to $1.46 billion by 2027, supported by a $1.5 billion upgrade at its Battleground plant on the Gulf Coast.
The reported $10 billion headline price implies a ~7x 2026–2027 estimated EBITDA multiple, compared with Occidental’s current valuation of 5.7x and 5.4x for 2026 and 2027.
“Even assuming a 15% tax on proceeds, the deal would remain modestly accretive at 6.2x on 2026E EBITDA,” Barclays said.
Source :
https://www.investing.com/news/stock-market-news/occidental-gains-on-potential-oxychem-sale-4260178
