Halliburton Co. and Dresser Industries announced a $7.7 billionmerger agreement yesterday that will create the world’s largestdrilling and energy engineering company with combined 1997 revenuesof $16 billion and combined market capitalization of over $19billion. The firm, which will retain the Halliburton name will have100,000 employees worldwide. It will be based in Dallas, TX.
Under the terms of the agreement, which was approved by theboard of directors of both companies, Dresser shareholders willreceive one newly issued share of Halliburton common stock for eachDresser common share. Based on Halliburton’s closing priceWednesday, the transaction is valued at $44/Dresser share. Thetransaction will be accounted for as a pooling of interests and isexpected to be tax-free to Dresser’s shareholders.
“It represents a major step forward toward our goal of creatinga fully integrated oil field and engineering and constructionservices company with a global leadership position,” saidHalliburton CEO Dick Cheney, who will be CEO of the combinedcompany.
“By joining together our highly complementary operations we willbe able to provide a broader and deeper array of services fromupstream to downstream. From seismic interpretation to wellconstruction, to the transportation and processing of oil and gas,the combined company will provide end-to-end integrated solutionsthat add value to our customers,” said Dresser CEO William E.Bradford. Halliburton President David J. Lesar said the transactionis expected to be accretive to earnings in the first full year ofoperations after an expected one-time charge to consolidate thebusinesses.
Standard & Poor’s placed its ratings of Dresser andHalliburton on CreditWatch with positive implications. S&P saidthe merger is not “initially expected to result in huge synergiesdue to consolidation of overlapping businesses, [but] market sharesare expected to increase significantly, particularly in the areasof drilling systems and engineering & construction.
The transaction is expected to be completed in the fall of 1998and is subject to regulatory approvals in the United States, Europeand several other countries, shareholder approvals, and customaryclosing conditions.
Halliburton has 262 million shares outstanding and will issue175 million new shares to Dresser shareholders. As a result, 60% ofthe shares of the merged company will be owned by Halliburtonshareholders and 40% by current Dresser shareholders.
Founded in 1919, Halliburton provides a broad range of energyservices and products, industrial and marine engineering andconstruction services. It’s primary subsidiary is Brown & RootEnergy Services. Dresser was established in Pennsylvania in 1880during the nation’s initial oil boom. It is a leading globalsupplier of drilling and well construction systems as well astechnologies, engineering equipment and project management for thetransportation and conversion of oil and natural gas.
©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |