Halliburton headquarters to Dubai - what's it mean?

[West]

CNN link

Cliffs notes: Halliburton is moving its Headquarters, CEO and stock exchange listing to the Middle East. This has triggered predictable bleating from Washington and Houston (where Halliburton is based) about how they abandoned the US.

[Shadowrun]

it probably means as a company they stand to make more profit by moving some of their operations overseas.
it probably did this for either tax reasons or to develop more contacts.
i also wonder how much shares dubai companies own of it before the move.

[Emperor]

I'm guessing they got a really good deal on some really nice office space. I'd love to move my HQ there.

[cardcounter0]

It means it removes them from U.S. oversight when they start helping Iran with some of their special projects.

[AzDesertRat]

Most of the profitable businesses are going to be in the Middle East and Africa---why not move closer to where your potential business is?

Tax considerations aside (which will be huge), Halliburton is probably not looked up too favorably by everyone with the recent revelations of accounting irregularities and other related stuff stemming from Iraq and KKR.

[esad]

I would say that the Jebel Ali Free Zone in Dubai has a lot to do with it.

From their website:

[ QUOTE ]
Incentives for Your Business

Jafza offers many incentives to make doing business with us easy and profitable.

* 100% foreign ownership: The ability to operate your business as a wholly owned entity, without any need for local partnership

* Corporate taxes are not applicable for a period of 50 years, a concession that is renewable. Companies may transfer any capital as required

* No import or re-export duties

* No personal income taxes

* No currency restrictions

* No restriction on hiring foreign employees

* Owned premises on leased land can be mortgaged: A company established in the Free Zone that has built its own facility may mortgage its premises to any bank or financing company for any of their debts or obligations

* Access to abundant energy makes it cost-effective for clients to conduct production operations

[/ QUOTE ]

[adios]

[ QUOTE ]
I would say that the Jebel Ali Free Zone in Dubai has a lot to do with it.

From their website:

[ QUOTE ]
Incentives for Your Business

Jafza offers many incentives to make doing business with us easy and profitable.

* 100% foreign ownership: The ability to operate your business as a wholly owned entity, without any need for local partnership

* Corporate taxes are not applicable for a period of 50 years, a concession that is renewable. Companies may transfer any capital as required

* No import or re-export duties

* No personal income taxes

* No currency restrictions

* No restriction on hiring foreign employees

* Owned premises on leased land can be mortgaged: A company established in the Free Zone that has built its own facility may mortgage its premises to any bank or financing company for any of their debts or obligations

* Access to abundant energy makes it cost-effective for clients to conduct production operations

[/ QUOTE ]

[/ QUOTE ]

Basically what you're posting is true. Interesting that many members of the majority party in Congress have decried subsidies to oil companies (which basically amount to a "hill of beans"); make noises about windfall profits taxes; and make noises about investigating Halliburton in particular then complains, seemingly bitterly, about a company not wanting to go along with those notions and actions. Not sure what those folks in Congress expect or want. Congress does have the option of providing a more business friendly environment if it wants to. When Congress makes noises about providing a more hostile environment for business, especially companies related to oil, it seems reasonable to me that companies would be expected to react negatively.

Also the original post mentioned complaints by Leahy in alluding to KBR no bid contracts in Iraq. This ground has been covered many times since the U.S. incursion into Iraq on this forum. BTW Halliburton is divesting itself of KBR:

Halliburton takes final step in KBR separation

If KBR was essential to Halliburtons bottom line, why the divestiture?

I also note that institutions and mutual funds own 82% of the outstanding Halliburton stock. What this basically means is that it is widely owned in 401ks and such. Put another way Halliburton is publically owned and not owned by some robber baron. When Halliburton adds shareholder value, it's adding shareholder value to stock that is publicly owned.

[cardcounter0]

[ QUOTE ]
If KBR was essential to Halliburtons bottom line, why the divestiture?

[/ QUOTE ]

Because it allows Halliburton to take profits from the KBR IPO, and focus on it's other businesses, such as assisting Iran oil field development.

[adios]

[ QUOTE ]
[ QUOTE ]
If KBR was essential to Halliburtons bottom line, why the divestiture?

[/ QUOTE ]

Because it allows Halliburton to take profits from the KBR IPO, and focus on it's other businesses, such as assisting Iran oil field development.

[/ QUOTE ]

Your reason doesn't speak to the Halliburton bottom line. From the link:

The plan includes the tax-free offering by energy services company Halliburton (NYSE: HAL) of more than 135 million shares of common stock it owns in Houston-based KBR in exchange for shares of Halliburton stock at an exchange rate to be determined.


KBR's (NYSE: KBR) stock was up about 7 percent Monday, closing at $24.12, $1.57 higher than its close on Feb. 23.

In addition, Halliburton said that if the exchange offer is completed but not fully subscribed, the company will distribute any remaining shares of KBR common stock to its stockholders by means of a special dividend.

Following the exchange, Halliburton and KBR, an energy engineering firm, will become two independent companies.


Halliburton shares are exchanged for KBR shares. Those KBR shares that aren't exchanged will be distributed to Halliburton stock holders as a one time special dividend. The reason that Halliburton stockholders might want to exchange their shares for KBR shares is that they would rather have a bigger stake in KBR. Don't see where this affects the bottom line. Perhaps you could explain a little further. It's a one time deal irregardless. The bottom line refers to profits in perpetuity. You could make the argument that Halliburton has determined that it's gotten as much as it can from it's interest in KBR and future business for KBR doesn't look as promising. IMO the reality is that KBR's business is more trouble than it's worth.

[mmbt0ne]

adios,

I would also say it is interesting that a company awarded billions in no-bid contracts decides to bounce the country after the ruling party changes and there are serious talks of investigations into these bids.