Buying Out a Giant

Though few Easterners know of it, Halliburton Co. of Dallas is a potent force in Southwestern business. Founded in 1921, Halliburton started out cementing oil wells, eventually branched into production of everything from transformer equipment to pneumatic handling gear for bulk materials. With 9,000 employees in 27 countries, Halliburton last year earned $16,780,000 on sales of $193,500,000. Last week, in a move calculated to thrust his company into the top echelon of U.S. corporations, Halliburton's President Loren B. Meaders (pronounced Medders), 55, announced that he was negotiating to buy Houston's Brown & Root, Inc.

Brown & Root--whose founder and president, Herman Brown, died last month--is one of the world's largest construction companies. Its building crews are responsible for dozens of the burgeoning brood of refineries and petrochemical plants that have sprung up in the South and Southwest, also handled the reconstruction of Guam after World War II. Recently, Brown & Root snagged the prestigious $40 million Mohole contract to drill through the earth's crust, and it has just started construction of NASA's $90 million Manned Spacecraft Center near Houston. Its average yearly business: $300 million.

Meaders has yet to work out a final sales price with George Brown, Herman's brother and successor as head of the family. But once terms are agreed upon, Halliburton will acquire the 95% of Brown & Root's stock now held by the Brown Foundation, a tax-and-charity arrangement. For the Brown family, the sale has double appeal: the Brown Foundation will be able to diversify its investments, and George Brown will stay on as president of Brown & Root. For Halliburton, the purchase is primarily a way of hedging its bets. Said Halliburton Vice President John Harbin: "The oil industry in general is troubled with excess production and capacity, and we see no immediate hope of things improving. We're trying to develop a cushion, and all we would like is for Brown & Root to keep going as well as it is now.''

This file is automatically generated by a robot program, so reader's discretion is required.