Restructuring / Turnaround Strategies Case Study

Should Halliburton Drop its KBR Unit?

Abstract:
KBR, the engineering and construction unit of Halliburton was formed as a series of mergers between companies like Dresser industries, Brown & Root, and MW Kellogg. KBR enjoyed leadership status in many areas of its operations. But the lackluster financial performance of KBR along with different controversies resulted in Halliburton share trading much below expectations. The case analysed operational as well as financial synergies among the different units of Halliburton as well as the trade off between the positives and negatives of KBR. The case concluded with an open-ended question; on whether Halliburton should divest KBR or function as a single entity?

Pedagogical Objectives:

• To understand the concept of strategic alternatives with reference to Halliburton and KBR
• To discuss the tricks to analyse political environment and use the best of companies benefit.

Keywords : Halliburton; KBR (Kellogg, Brown and Root); David J Laser; ESG (Energy Services Group); Dick Cheney; No bid cost plus contract; Asbestos litigation; Restructuring / Turnaround Strategies Case Study; Inorganic growth; Operating profit; Technological innovation; Barracuda-Caratinga project; Petrobus; Logcap; LNG (liquefied natural gas) market; Cost overrun