HOUSTON�Halliburton Co., Dallas, has revealed that it plans to sell the Dresser Equipment Group business segment and repurchase up to 44 million shares, or about 10% of outstanding common stock. The group supplies equipment to the energy and chemical industries. No buyer was named.
"Halliburton originally obtained the DEG business operations as part of the Dresser Industries acquisition in 1998," said Dick Cheney, Halliburton's chairman and CEO. The previously announced sales of DEG's interests in the Dresser-Rand and Ingersoll Dresser Pump joint ventures prompted a thorough review of DEG's remaining lines of business.
"It has now been determined that these businesses do not closely fit Halliburton's core businesses and long-term goals and objectives. The eventual disposition of these businesses will benefit Halliburton by bringing sharper focus of the company's resources on its core business activities. Proceeds from the recent sales of DEG's interests in D-R and IDP, and from the planned sale of the remaining businesses, will be used by Halliburton for a combination of acquisitions supporting core activities and for internal investment opportunities."
Halliburton said it does not expect to complete sales of DEG's remaining businesses until fourth quarter 2000 or first quarter 2001.
Analysts with Moody's Investors Service noted the sale of the Dresser Equipment Group may weaken the stability of Halliburton's earnings and cash flow because the remainder of Halliburton's service and construction businesses are more cyclical. Even assuming conservative Halliburton financial policies, said Moody's, the sale may also result in a modest decline in cash flow relative to debt, because proceeds will likely be used for purposes other than debt reduction.