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Halliburton, Dresser merge
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February 26, 1998: 6:41 a.m. ET
$7.7-billion deal forms world's largest oil services firm with 100,000 workers
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NEW YORK (CNNfn) - Halliburton Co. agreed to acquire rival energy services company, Dresser Industries Inc., in a $7.7-billion stock swap that would create the world's largest oil services concern.
The tax-free transaction, which will be accounted for as a pooling of interests, was approved by the boards of both companies.
The combined company, which would surpass Schlumberger Ltd. as the industry leader, will have more than $16 billion in annual revenue and 100,000 employees.
And, despite historically low oil prices, the increased activity in offshore and international oil exploration in recent years will give the combined company a comfortable backlog of more than $13 billion in contracts.
Based on the terms of the agreement, Dresser shareholders will receive one Halliburton share for each share they own, valuing Dresser stock at $44 apiece. That represents a 14 percent premium to Wednesday's closing price (DI) of 38-11/16. Halliburton (HAL) closed at 44.
Neither Halliburton nor Dresser has been a major player in merger activity in recent years. The last major deal for Dresser came in 1994 when the Dallas-based company paid $1 billion to acquire Baroid Corp., a manufacturer of drilling fluids.
Halliburton will hold nine seats on the new 14-member board. William E. Bradford, chairman of Dresser, will be chairman of the new company. Halliburton Chairman Richard Cheney -- and former U.S. Defense Secretary -- will be chief executive.
Halliburton was advised by Goldman Sachs and SBC Warburg Dillion Read. Dresser was advised by Salomon Smith Barney.
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Halliburton
Dresser
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