Tuesday AM March 13th, 2007
by: Ed Mayberry, March 13, 2007 5:03:00 am
Halliburton's decision to open a corporate headquarters office in the United Arab Emirates does not mean the loss of jobs in Houston, according to the company. Halliburton will maintain a corporate office in Houston, where the firm employs around 4,000. But Halliburton Chairman, President and C-E-O Dave Lesar will move to Dubai, as the company strengthens its presence in the Middle East. Barbara Shook with Energy Intelligence Group says it's a logical step.
"The office of the chairman and chief executive officer will be in Dubai. This is very important, really, in that part of the world. You need your top executives in the negotiations with national oil companies. Remember, these are instruments of state, no matter how closely they're to traditional corporations, like we have here in Europe and in the U.S. and elsewhere. Often, transactions can be negotiated with the head of state, so you want your highest-ranking people accessible to them."
On the heals of the outcry over a Dubai firm trying to run U.S. ports, Oversight and Government Reform Committee Chairman Henry Waxman plans to hold a hearing on Halliburton's decision. But Shook says the company is simply going to the source.
"I don't see that as an issue. In fact, the Dubai ports issue really a gross over-reaction on the part of many parties in the United States, because this organization runs ports all over the world, and they're in business—they're not in politics. Halliburton's decision to relocate the top executives to the Mideast is just a reflection of what where the international oil and gas industries are going. The growth will not come in North America, although that still remains the source of half of Halliburton's revenue. The growth is coming in Asia, the Mideast and Africa."
Dubai has grown to having round-the-clock traffic jams, a busy airport and soon will have the world's tallest building.
South Korea's top audit agency said it's finalized its one-year probe into the 2003 sale of Korea Exchange Bank to Lone Star Funds. The Board of Audit says it's determined the sale price paid by the Dallas-based private equity fund was lowered inappropriately. The board also says the former head of the country's fifth-ranked bank and a former finance ministry official "exaggerated insolvency" at the bank. It says that made the sale to the fund "inevitable and inappropriately lowering the sale price." Under South Korean regulations, an investment fund can't take over a bank unless the bank is determined insolvent. Prosecutors have issued arrest warrants for Lone Star Funds' vice chairman, Ellis Short, and General Counsel Michael Thomson last year. They've also indicted Lone Star's South Korean head, Paul Yoo, for alleged stock manipulation and tax evasion. Lone Star has consistently denied any wrongdoing, calling the accusations "politically motivated."
UnitedHealth Group says it has agreed to buy Las Vegas-based health-care services provider Sierra Health Services for about $2.6 billion. UnitedHealth is offering Sierra shareholders $43.50 a share. The deal must be cleared by Sierra shareholders and regulators in Texas, Nevada and California. UnitedHealth expects the transaction to close by the end of the year. The deal will add about 310,000 employer-sponsored health plan members in Nevada to UnitedHealth's rolls, as well as about 320,000 people from senior and government programs throughout the U.S.
Retailer Dollar General says it has an agreement to be purchased by affiliates of private equity firm Kohlberg Kravis Roberts for $22 a share cash. The total value of the deal is put at $7.3 billion dollars, including about $380 million in debt assumption. The agreement provides a premium of about 31 percent over Dollar General's closing stock price on Friday. The deal, subject to approval of shareholders, is expected to close in the third quarter of this year. Dollar General has more than 8,200 stores.
China's government says its monthly trade surplus soared to the second-highest level on record last month, some $23.7 billion. A government official criticized proposed U.S. punitive tariffs as a violation of free trade, saying they would hurt American companies.
The federal deficit for the first five months of the budget year is down sharply as growth in tax collections outpaced spending increases. The Treasury Department says the shortfall from October through February totaled $162.2 billion. That's a drop of 25.5 percent from the same period a year ago. For the budget year that began October 1st, revenues are up by 9.3 percent while the rise in spending was 2.3 percent. The Bush administration is forecasting that the deficit for this year will shrink to $244 billion from last year's $248.2 billion.
Some Democrats are backing a bill authorizing billions of dollars in new water projects. The bill has been stalled by controversy over the Army Corps of Engineers. Supporters are pressing Congress to pass the Water Resources Development Act. Similar bills have failed to pass since 2000, when a government auditor found Army Corps of Engineers officials had doctored data to justify a Mississippi locks water project. The Associated Press reports that this year, the bill may run into some added scrutiny from those looking to hold Democrats to their new budget rules aimed at political pork. A House transportation and infrastructure panel, led by Dallas Congresswoman Eddie Bernice Johnson, could vote on the bill this week. Getting the bill passed is a priority for the Natural Water Resources Association. Group president Bill West says communities are having a difficult time meeting their water needs. West also heads the Guadalupe-Blanco River Authority in Texas.