Dresser signs pact to buy Baroid Corp.

September 08, 1993|By Bloomberg Business News

HOUSTON -- Dresser Industries Inc. said it signed a definitive agreement to acquire Baroid Corp. for about $900 million in stock.

Together, the two oil field service concerns would control the drilling fluids market and strengthen Dresser's ranking as the nation's fourth-largest oil service company.

The merger, under which Baroid stock holders would turn over their shares for 0.40 of a Dresser share, would dilute Dresser earnings, said George Gaspar, an analyst with Robert W. Baird & Co.

"They certainly would cut costs, and it would make a bigger company," said Mr. Gaspar, who had estimated 1994 earnings at $1.25 a share. "But you've got to recognize the dilution to earnings."

Mr. Gaspar now expects earnings of roughly $1.10 a share next year. Dresser said the merger wouldn't affect earnings in the first year after the merger is completed sometime in mid-January 1994.

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