Halliburton was founded as an oilfield services firm in 1919, about the same time Brown & Root was formed as an engineering and construction company. But in the early '60s, the Brown brothers, who held the company privately, sold it to Halliburton.
In 1995 Vice President Dick Cheney became CEO of Halliburton and the following year started to combine all of the support offices into one shared-services group.
Halliburton acquired Dresser Industries in 1998. Dresser had its risk management operations as part of its treasury department. Dresser also owned M. W. Kellogg, an engineering firm and competitor of B&R with a large presence in technology licensing to the refining and petrochemical sector. The E&C operations were combined as Kellogg Brown & Root.
After the Dresser integration, Halliburton had three basic units: its flagship oilfield and energy services, the combined E&C firm KBR and Dresser Equipment. As the only manufacturing operation, Dresser ended up as odd one out, and was sold to private investors in 2001, the year before Dick Cheney left to run for vice president.
In 2002, the shared services group was eliminated, which provided Halliburton the opportunity to separate its two companies. In November 2006, KBR was spun out from Halliburton.
The split was accomplished in two phases. In the initial public offering in November 2006, 20 percent of KBR was sold to the public. At that time, risk management was shifted from legal to treasury for KBR. It had been shifted in 2002 for Halliburton, at the end of the shared-services era.
The bulk of the separation was completed through an exchange offer: Shareholders could take KBR shares in exchange for Halliburton shares based on a formula. Shareholders were given less than a month to make a decision and the final settlement date was in early April.
It wasn't until April 2007 that the two companies completed the division of their insurance programs.
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October 1, 2007
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