Halliburton and Dresser Industries merge

Halliburton Company and Dresser Industries have announced a strategic combination that will create an oilfield services and engineering and construction company with the broadest range of services to the petroleum industry world-wide.
Under the terms of a definitive merger agreement unanimously approved by the board of directors of both companies, Dresser Industries' shareholders will receive one newly issued share of Halliburton common stock for each Dresser common share. Based on Halliburton's closing price yesterday, the transaction is currently valued at $ 44.00 per Dresser share, or a total of approximately $ 7.7 bn. The transaction will be accounted for as a pooling of interests and is expected to be tax-free to Dresser's shareholders.
The companies' 1997 combined revenues exceeded $ 16 bn and the total backlog was approximately $ 13 bn. The combined market capitalisation is over $ 19 bn. The company will continue to be called Halliburton Company and remain headquartered in Dallas, with a work force of approximately 100,000 employees world-wide.
Dick Cheney, Halliburton's chairman and CEO, who will be CEO of the combined company, said, "Halliburton and Dresser are an outstanding business and cultural fit. This is a win-win combination for both companies' shareholders, customers and employees. It represents a major step forward toward our goal of creating a fully integrated oilfield and engineering and construction services company with a global leadership position. The ability to provide complete, seamless solutions for customers is becoming the critical factor in winning large international service contracts. We will have the broadest range of capabilities in the industry and will remain focused on meeting the multiple and growing needs of customers world-wide."
William E. Bradford, chairman and CEO of Dresser, who will become chairman of Halliburton, said, "The union of these two great companies is ideal for our customers as well. Together we will be able to do more for our customers than either of us could have done separately. By joining together our highly complementary operations we will be able to provide a broader and deeper array of services from upstream to downstream. From seismic interpretation to well construction, to the transportation and processing of oil and gas, the combined company will provide end-to-end integrated solutions that add value to our customers. Talented and motivated employees of both companies can look forward to exciting futures with numerous opportunities for growth and advancement."
David J. Lesar, president and coo of Halliburton who will continue in this role, said, "We know each other's business well and have agreed on the organisational structure, which will facilitate a quick, smooth integration. With our combined financial strength and complementary capabilities, the combined company will also have the resources to significantly increase investments in state-of-the-art technology while making targeted acquisitions to further add to our capabilities. In addition, with the revenue enhancements and cost reductions we will get from integrating these broad capabilities, we expect the transaction to be accretive to earnings per share in the first full year, after an expected one-time charge to consolidate the businesses."
Five Dresser directors will join the Halliburton board, increasing its size to 14. Donald C. Vaughn, president and coo of Dresser, will become vice chairman of Halliburton. Dale P. Jones, vice chairman of Halliburton Company, has elected to retire from the board of directors and as vice chairman of Halliburton when the merger is completed.
The transaction is expected to be completed in the fall of 1998 and is subject to regulatory approvals in the United States, Europe and several other countries, shareholder approvals, and customary closing conditions.
SBC Warburg Dillon Read Inc. and Goldman Sachs & Co. are serving as financial advisors to Halliburton. Salomon Smith Barney is serving as financial advisorto Dresser.

Halliburton Company is one of the world's largest diversified energy services, engineering, maintenance, and construction companies. Founded in 1919, Halliburton provides a broad range of energy services and products, industrial and marine engineering and construction services.

Dresser is a leading global supplier to the total hydrocarbon energy stream. Dresser's product and service offerings encompass sophisticated drilling and well construction systems as well as technologies, engineered equipment and project management for the transportation and conversion of oil and natural gas.