[Federal Register Volume 63, Number 211 (Monday, November 2, 1998)]
[Notices]
[Pages 58770-58780]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29222]


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DEPARTMENT OF JUSTICE

Antitrust Division


Proposed Final Judgment and Competitive Impact Statement

United States v. Halliburton Company and Dresser Industries, Inc.

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec. 16(b)-(h), that a proposed Final 
Judgment, Stipulation and Order, and Competitive Impact Statement have 
been filed with the United States District Court for the District of 
Columbia in United States v. Halliburton Company and Dresser 
Industries, Inc., Civil Action No. 98-CV-2340. The proposed Final 
Judgment is subject to approval by the Court after the expiration of 
the statutory 60-day public comment period and compliance with the 
Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h).
    On September 29, 1998, the United States filed a Complaint seeking 
to enjoin a transaction in which Halliburton Company (``Halliburton'') 
would merge with Dresser Industries, Inc. (``Dresser''). The Complaint 
alleges that the merger would combine two of four companies that 
provide logging-while-drilling (``LWD'') services for oil and natural 
gas drilling projects. Oil and gas companies use LWD tools and services 
when drilling non-vertical wells, especially when drilling offshore. 
While the drilling ongoing, sensors in

[[Page 58771]]

these tools send back data that allow the drillers to evaluate the 
formation through which the drill bit is cutting. The formation 
evaluation data assist the driller in locating oil and gas reserves. 
Because LWD tools transmit formation data during the drilling, the 
driller can detect changes in downhole pressure and prevent the drill 
bit from straying out of the zone of oil and gas, thereby reducing the 
time and risk of drilling. The Complaint alleges that the proposed 
acquisition would substantially lessen competition in the provision of 
LWD services in the United States in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18.
    The proposed Final Judgment orders defendants to sell Halliburton's 
worldwide LWD Business, as defined in Schedule A of the Proposed Final 
Judgment, to a purchaser acceptable to plaintiff in its sole 
discretion. The Final Judgment and the stipulation and Order also 
impose a hold separate agreement that, in essence, requires the 
defendants to ensure that, until the divestiture mandated by the Final 
Judgment has been accomplished, the LWD Business will be held separate 
and apart from, and operated independently of, any of defendants' other 
assets and businesses. A Competitive Impact Statement filed by the 
United States describes the Complaint, the proposed Final Judgment, and 
remedies available to private litigants.
    Public comment is invited within the statutory 60-day comment 
period. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Written comments should be 
directed to Roger W. Fones, Chief, Transportation, Energy, and 
Agriculture Section, Antitrust Division, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20530 (telephone: (202) 307-6351).
    Copies of the Complaint, Stipulation and Order, proposed Final 
Judgment, and Competitive Impact Statement are available for inspection 
in Room 215 of the U.S. Department of Justice, Antitrust Division, 325 
Seventh Street, N.W., Washington, DC 20530 (telephone: (202) 514-2481), 
and at the office of the Clerk of the United States District Court for 
the District of Columbia, 333 Constitution Avenue, N.W., Washington, DC 
20001. Copies of any of these materials may be obtained upon request 
and payment of a copying fee.
Constance K. Robinson,
Director of Operations and Merger, Enforcement, Antitrust Division.

Stipulation and Order

    It is hereby Stipulated by and between the undersigned parties, by 
their respective attorneys, as follows:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto, and venue of this action is 
proper in the United States Court for the District of Columbia.
    2. The parties stipulate that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedure and Penalties Act (15 
U.S.C. Sec. 16), and without further notice to any party or other 
proceedings, provided that plaintiff has not withdrawn its consent, 
which it may do at any time before the entry of the proposed Final 
Judgment by serving notice thereof on defendants and by filing that 
notice with the Court.
    3. Defendant shall abide by and comply with the provisions of the 
proposed Final Judgment pending entry of the Final Judgment by the 
Court, or until expiration of time for all appeals of any Court ruling 
declining entry of the proposed Final Judgment, and shall, from the 
date of the signing of this Stipulation by the parties, comply with all 
the terms and provisions of the proposed Final Judgment as though they 
were in full force and effect as an order of the Court.
    4. This Stipulation shall apply with equal force and effect to any 
amended proposed Final judgment agreed upon in writing by the parties 
and submitted to the Court.
    5. In the event that plaintiff withdraws its consent, as provided 
in paragraph 2 above, or in the event that the proposed Final Judgment 
is not entered pursuant to this Stipulation, the time has expired for 
all appeals of any Court ruling declining entry of the proposed Final 
Judgment, and the Court has not otherwise ordered continued compliance 
with the terms and provisions of the proposed Final Judgment, then the 
parties are released from all further obligations under this 
Stipulation, and the making of this Stipulation shall be without 
prejudice to any part in this or any other proceeding.
    6. Defendants represent that the divestiture ordered in the 
proposed Final Judgment can and will be made, and that the defendants 
will later raise no claims of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
therein.

      Respectfully submitted,

    For Plaintiff, United States of America:
Angela L. Hughes,
Member of the Florida Bar No. 211052, Attorney, Antitrust Division, 
U.S. Department of Justice, 325 Seventh St., N.W., Suite 500, 
Washington, DC 20530, (202) 307-6410 or (202) 307-6351, Facsimile: 
(202) 307-2784.

    Dated: September 29, 1998.

    For Defendant, Halliburton Company:
Ky P. Ewing, Jr.,
District of Columbia Bar No. 41285, Vinson & Elkins L.L.P., The Willard 
Office Building, 1455 Pennsylvania Avenue, N.W., Washington, DC 20004-
1008, (202) 639-6500.

    For Defendant, Dresser Industries, Inc.:
David A. Hickerson,
District of Columbia Bar No. 414723, Weil, Gotshal & Manges L.L. P., 
1615 L Street, N.W., Washington, DC 20035, (202) 682-7000.

Order

    It is So Ordered, this ______ day of ______, 1998.
----------------------------------------------------------------------
United States District Court Judge

Final Judgment

    Whereas, plaintiff, the United States of America, filed its 
Complaint in this action on September 29, 1998, and plaintiff and 
defendants Halliburton Company (``Halliburton'') and Dresser 
Industries, Inc. (``Dresser'') by their respective attorneys, having 
consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact or law herein, and without this Final 
Judgment constituting any evidence against or an admission by any party 
with respect to any issue of law or fact herein;
    And Whereas, defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And Whereas, the essence of this Final Judgment is prompt and 
certain divestiture of Halliburton's LWD Business to assure that 
competition is not substantially lessened;
    And Whereas, plaintiff requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And Whereas, defendants have represented to the plaintiff that the 
divestiture ordered herein can and will be made and that defendants 
will later raise no claims of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture requirements 
contained below;
    Now, Therefore, before the taking of any testimony, and without 
trial or

[[Page 58772]]

adjudication of any issue of fact or law herein, and upon consent of 
the parties hereto, it is hereby Ordered, Adjudged, and Decreed as 
follows:

I. Jurisdiction

    This Court has jurisdiction over defendants hereto and over the 
subject matter of this action. The Complaint states a claim upon which 
relief may be granted against defendants, as hereafter defined, under 
Section 7 of the Clayton Act, as amended (15 U.S.C. Sec. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Dresser'' means Dresser Industries, Inc., a Delaware 
corporation with its headquarters and principal place of business in 
Dallas, Texas, and its; successors, assigns, subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, directors, 
officers, managers, agents, and employees.
    B. ``Halliburton'' means Halliburton Company, a Delaware 
corporation with its headquarters and principal place of business in 
Dallas, Texas, and its successors, assigns, subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, directors, 
officers, managers, agents, and employees.
    C. ``HESI'' means Halliburton Energy Services, Inc., a wholly owned 
subsidiary of Halliburton.
    D. ``Intellectual Property'' means intellectual property used in 
connection with the use, manufacture and/or sale of the transferred LWD 
and MWD tools and related software, including without limitation, 
foreign and domestic patent applications and patents; trade secrets; 
foreign and domestic copyrights and copyright registrations; and 
foreign and domestic common law and registered trademarks or service 
marks, and trademarks or service mark applications.
    E. ``LWD Services'' means the services and products used to provide 
real-time logging-while-drilling formation evaluation data is utilized 
to evaluate the formation characteristics of a given geologic 
formation. LWD Services also include MWD Services provided in 
conjunction with LWD Services.
    F. ``LWD Business'' means `HESI's worldwide business providing LWD 
Services and includes the tangible and intangible assets, obligations, 
and understandings set forth in Schedule A.
    G. ``MWD Services'' means the services and products used in 
drilling directional wells to provide real-time information about the 
inclination and azimuth of downhole drilling tools at the bottom of the 
hole.
    H. ``Person'' means any natural person, corporation, association, 
firm, relationship, or other business or legal entity.

III. Applicability

    A. The provisions of this Final Judgment apply to each of the 
defendants, their successors and assigns, their subsidiaries, 
directors, officers, managers, agents, and employers, and all other 
persons in active concert or participation with any of them who shall 
have received actual notice of this Final Judgment by personal service 
or otherwise.
    B. Defendants shall require, as a condition of the sale or other 
disposition of all or substantially all of the LWD Business, that the 
acquiring party agree to be bound by the provisions of this Final 
Judgment.

IV. Divestiture

    A. Defendants are hereby ordered and directed in accordance with 
the terms of this Final Judgment, within one hundred and eighty (180) 
calendar days after this Final Judgment is filed by plaintiff or five 
(5) days after notice of the entry of this Final Judgment by the Court, 
whichever is later, to divest the LWD Business as an ongoing business, 
in accordance with the terms and commitments set forth in Schedule A, 
to an acquirer acceptable to plaintiff in its sole discretion.
    B. Defendants shall use their best efforts to accomplish the 
divestiture ordered by this Final Judgment as expeditiously and timely 
as possible. Plaintiff, in its sole discretion, may extend the time 
period for any divestiture for an additional period of time not to 
exceed thirty (30) days.
    C. In accomplishing the divestiture ordered by this Final Judgment, 
defendants promptly shall make known, by usual and customary means, the 
availability for sale of the LWD Business Defendants shall inform any 
person making an inquiry regarding a possible purchase that the sale is 
being made pursuant to this Final Judgment and provide such person with 
a copy of the Final Judgment. Defendants shall also offer to furnish to 
all prospective purchasers, subject to customary confidentiality 
assurances, all information regarding the LWD Business customarily 
provided in a due diligence process except such information subject to 
attorney-client privilege or attorney work-product privilege. 
Defendants shall make available such information to plaintiff at the 
same time that such information is made available to any other person. 
Defendants shall not interfere with any negotiations by any purchaser 
to employ any Halliburton employee of the LWD Business.
    D. Defendants shall permit prospective purchasers of the LWD 
Business to have reasonable access to their personnel and to make such 
inspection of the physical facilities and any and all of their 
financial, operational, or other documents and information customarily 
provided as part of a due diligence process.
    E. Defendants shall not take any action, direct or indirect, that 
will impede in any way the operation of the LWD Business.
    F. Unless plaintiff otherwise consents in writing, divestiture 
pursuant to Section IV, or by trustee appointed pursuant to Section V 
of this Final Judgment, shall include all of the LWD Business, and 
shall be accomplished in such a way as to satisfy plaintiff, in its 
sole discretion, that the LWD Business can and will be used by the 
purchaser as part of a viable, ongoing business engaged in the 
provision of LWD Services. The divestiture, whether pursuant to Section 
IV or Section V of this Final Judgment, shall be made (1) to a 
purchaser who is demonstrated to plaintiff's sole satisfaction (a) to 
have the capability and intent of competing effectively in LWD 
Services, and (b) to have the managerial, operational, and financial 
capability to compete effectively in LWD Services, and (2) on terms 
none of which give defendants the ability unreasonably to raise the 
purchaser's costs, to lower the purchaser's efficiency, or otherwise to 
interfere in the ability of the purchaser to compete effectively.
    G. Defendants shall not sell the LWD Business to Baker Hughes, 
Inc., Schlumberger Limited, or any of their affiliates or subsidiaries 
during the life of this decree.

V. Appointment of Trustee

    A. In the event that defendants have not divested the LWD Business 
within the time specified in Section IV of this Final Judgment, the 
Court shall appoint, on application of the United States, a trustee 
selected by plaintiff to effect the divestiture of the LWD Business. 
Until such time as a trustee is appointed, defendants shall continue 
their efforts to effect the divestiture as specified in Section IV.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the LWD Business. The trustee 
shall have the power and authority to accomplish the divestiture at the 
best price then obtainable upon a reasonable effort by the trustee, 
subject to the provisions of Sections IV and VI

[[Page 58773]]

of this Final Judgment, and shall have such other powers as the Court 
shall deem appropriate. Subject to Section V(C) of this Final Judgment, 
the trustee shall have the power and authority to hire at the cost and 
expense of defendants any investment bankers, attorneys, or other 
agents reasonably necessary in the judgment of the trustee to assist in 
the divestiture, and such professionals and agents shall be accountable 
solely to the trustee. The trustee shall have the power and authority 
to accomplish the divestiture at the earliest possible time to a 
purchaser acceptable to plaintiff in its sole discretion, and shall 
have such other powers as this Court shall deem appropriate. Defendants 
shall not object to a sale by the trustee on any grounds other than the 
trustee's malfeasance. Any such objections by defendants must be 
conveyed in writing to plaintiff and the trustee within ten (10) 
calendar days after the trustee has provided the notice required under 
Section VI of this Final Judgment.
    C. The trustee shall serve at the cost and expense of defendants, 
on such terms and conditions as the Court may prescribe, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to defendants, and the trust shall then 
be terminated. The compensation of such trustee and of any 
professionals and agents retained by the trustee shall be reasonable in 
light of the value of the divested business and based on a fee 
arrangement providing the trustee with an incentive based on the price 
and terms of the divestiture and the speed with which it is 
accomplished.
    D. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestiture, including their best efforts to 
effect all necessary regulatory approvals. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of the business to be divested, and Defendants 
shall develop financial or other information relevant to the business 
to be divested customarily provided in a due diligence process as the 
trustee may reasonable request, subject to customary confidentiality 
assurances. Defendants shall permit bona fide prospective purchasers of 
the assets to have reasonable access to their personnel and to make 
such inspection of physical facilities and any and all financial, 
operational or other documents and other information as may be relevant 
to the divestiture required by this Final Judgment.
    E. After its appointment, the trustee shall file monthly reports 
with the parties and the Court setting forth the trustee's efforts to 
accomplish the divestiture ordered under this Final Judgment; provided, 
however, that to the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the business to be divested, 
and shall describe in detail each contact with any such person during 
that period. The trustee shall maintain full records of all efforts 
made to divest the LWD Business.
    F. If the trustee has not accomplished such divestiture within six 
(6) months after its appointment, the trustee thereupon shall file 
promptly with the Court a report setting forth (1) the trustee's 
efforts to accomplish the required divestiture, (2) the reasons, in the 
trustee's judgment, why the required divestiture has not been 
accomplished, and (3) the trustee's recommendations; provided, however, 
that to the extent such reports contain information that the trustee 
deems confidential, such reports shall not be filed in the public 
docket of the Court. The trustee shall at the same time furnish such 
report to the parties, who shall each have the right to be heard and to 
make additional recommendations consistent with the purpose of the 
trust. The Court shall enter thereafter such orders as it shall deem 
appropriate in order to carry out the purpose of the trust which may, 
if necessary, include extending the trust and the term of the trustee's 
appointment by a period requested by plaintiff.

VI. Notification

    Within two (2) business days following execution of a definitive 
agreement, contingent upon compliance with the terms of this Final 
Judgment, to effect, in whole in part, any proposed divestiture 
pursuant to Section IV or V of this Final Judgment, defendants or the 
trustee, whichever is then responsible for effecting the divestiture, 
shall notify plaintiff of the proposed divestiture. If the trustee is 
responsible, it shall similarly notify defendants. The notice shall set 
forth the details of the proposed transaction and list the name, 
address and telephone number of each person not previously identified 
who offered to, or expressed an interest in or a desire to, acquire any 
ownership interest in the business to be divested, together with full 
details of same. Within fifteen (15) calendar days of receipt by 
plaintiff of such notice, plaintiff may, in its sole discretion, 
request from defendants, the proposed purchaser or purchasers, or any 
other third party, additional information concerning the proposed 
divestiture and the proposed purchaser. Defendants and the trustee 
shall furnish any additional information requested from then within 
fifteen (15) calendar days of the receipt of the request, unless the 
parties shall otherwise agree. Within thirty (30) calendar days after 
receipt of the notice of within twenty (20) calendar days after 
plaintiff has been provided with the additional information requested 
from defendants, the proposed purchaser or purchasers, and any third 
party, whichever is later, plaintiff shall provide written notice to 
defendants and the trustee, if there is one, stating whether or not it 
objects to the proposed divestiture. If plaintiff provides written 
notice to defendants and the trustee that it does not object, then the 
divestiture may be consummated, subject only to defendants' limited 
right to object to the sale under Section V(B) of this Final Judgment. 
Absent written notice that plaintiff does not object to the proposed 
purchaser or upon objection by the plaintiff, a divestiture proposed 
under Section IV or V may not be consummated. Upon objection by 
defendants under the provision in Section V(B), a divestiture proposed 
under Section V shall not be consummated unless approved by the Court.

VII. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter and every thirty (30) calendar days thereafter until the 
divestiture has been completed, whether pursuant to Section IV or 
Section V of this Final Judgment, defendants shall deliver to plaintiff 
an affidavit as to the fact and manner of compliance with Section IV or 
V of this Final Judgment. Each such affidavit shall include, inter 
alia, the name, address, and telephone number of each person who, at 
any time after the period covered by the last such report, made an 
offer to acquire, expressed an interest in acquiring, entered into 
negotiations to acquire, or was contacted or made an inquiry about

[[Page 58774]]

acquiring, any interest in the business to be divested, and shall 
describe in detail each contact with any such person during that 
period. Each such affidavit shall also include a description of the 
efforts that defendants have taken to solicit a purchaser for the 
relevant business and to provide required information to prospective 
purchasers including the limitations, if any, on such information.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, defendants shall deliver to plaintiff an affidavit 
which describes in detail all actions defendants have taken and all 
steps defendants have implemented on an on-going basis to perserve the 
LWD Business pursuant to Section VIII of this Final Judgment. The 
affidavit also shall describe, but not be limited to, defendants' 
efforts to maintain and operate the LWD Business as an active 
competitor, maintain the management, staffing, research and development 
activities, sales, marketing and pricing of the LWD Business, and 
maintain the LWD Business in operable condition at current capacity 
configurations. Defendants shall deliver to plaintiff an affidavit 
describing any changes to the efforts and actions outlined in 
defendants' earlier affidavit(s) filed pursuant to this Section within 
fifteen (15) calendar days after the change is implemented.
    C. Until one year after such divestiture has been completed, 
defendants shall preserve all records of all efforts made to preserve 
the business to be divested and effect the divestiture.

VIII. Preservation of Assets

    Until the divestiture required by the Final Judgment has been 
accomplished:
    A. Defendants shall take all steps necessary to assure that the LWD 
Business will be maintained as a separate and independent, economically 
viable, ongoing business with its assets (including Intellectual 
Property, management, operations, and books and records) separate, 
distinct, and apart from those of defendants. Defendants shall use all 
reasonable efforts on behalf of themselves and the LWD Business to 
maintain and increase sales of LWD Services, continue current plans for 
research, development, and testing of LWD Services, and otherwise 
maintain the business as a viable and active competitor. Defendants 
shall take no action that would jeopardize the sale of the LWD 
Business.
    B. Defendants shall not sell, lease, assign, transfer or otherwise 
dispose of, or pledge as collateral for loans (except such loans as are 
currently outstanding or replacements or substitutes therefore), assets 
required to be divested pursuant to Section IV or V, except that any 
component of such assets as is replaced in the ordinary course of 
business with a newly purchased, assembled, remanufactured or 
manufactured component may be sold or otherwise disposed of, provided 
the newly purchased, assembled, remanufactured or manufactured 
component is so identified as a replacement component for one to be 
divested.
    C. Defendants shall provide and maintain sufficient working capital 
to maintain the LWD Business as a viable, ongoing business consistent 
with the requirements of Section VIII(A).
    D. Defendants shall preserve the assets required to be divested 
pursuant to Section IV or V, except those replaced with newly acquired 
assets in the ordinary course of business, in a state of repair equal 
to their state of repair as of the date this Final Judgment is filed, 
ordinary wear and tear excepted. Defendants shall preserve the 
documents, books, and records relating to the LWD Business until the 
date of divestiture of the LWD Business.
    E. Except in the ordinary course of business, Defendants shall 
refrain from terminating or altering current employment, salary, or 
benefit agreements for any executive or managerial person whose 
principal responsibilities are with the LWD Business, or for any sales, 
manufacturing, marketing, engineering, or other technical person of the 
LWD Business. Defendants shall also refrain from transferring any 
employee so employed without the prior approval of plaintiff.
    F. Defendants shall use all reasonable efforts to maintain the 
manufacturing activities of the LWD Business, and shall maintain at a 
level no less than the highest level since February 25, 1998, research 
and development funding, promotional, advertising, sales, technical 
assistance, marketing, and merchandising support for the LWD Business.
    G. Defendants shall provide and maintain sufficient lines and 
sources of credit to maintain the LWD Business as an economically 
viable, ongoing business.
    H. Defendants shall take all steps necessary to ensure that the 
facilities associated with the LWD Business are fully maintained in 
operable condition at no lower than their current rated capacity, and 
shall maintain and adhere to normal repair and maintenance schedules 
for the LWD Business.
    I. Defendants shall maintain, in accordance with sound accounting 
principles, separate, true, accurate and complete financial ledgers, 
books and records that report, on a periodic basis, such as the last 
business day of every month, consistent with past practices, the 
assets, liabilities, expenses, revenues, income, profit and loss of the 
LWD Business.
    J. Defendants shall take no action that would interfere with the 
ability of any trustee appointed pursuant to the Final Judgment to 
complete the divestiture pursuant to the Final Judgment to a suitable 
purchaser.
    K. Until such time as the LWD Business is divested, the assets to 
be divested shall be managed by a person appointed by Halliburton 
within ten (10) business days of consummation of the merger of 
Halliburton and Dresser, subject to plaintiff's approval. The person so 
appointed shall have complete managerial responsibility for the LWD 
Business, subject to the provisions of this Order and the Final 
Judgment. In the event that the person becomes unable to perform his 
duties, defendants shall appoint, subject to plaintiff's approval, a 
replacement within ten (10) business days. Should defendants fail to 
appoint a replacement acceptable to plaintiff within ten (10) business 
days, plaintiff shall appoint a replacement.

IX. Financing

    Defendants are ordered and directed not to finance all or any part 
of any purchase by purchaser made pursuant to Sections IV or V of this 
Final Judgment.

X. Compliance Inspection

    For purposes of determining or securing compliance with the Final 
Judgment and subject to any legally recognized privilege, from time to 
time.
    A. Duly authorized representatives of the United States Department 
of Justice, upon written request of the Attorney General or of the 
Assistant Attorney General in charge of the Antitrust Division, and on 
reasonable notice to defendants made to their principal offices, shall 
be permitted:
    1. Access during office hours of defendants to inspect and copy all 
books, ledgers, accounts, correspondence, memoranda, and other records 
and documents in the possession or under the control of defendants, who 
may have counsel present, relating to the matters contained in this 
Final Judgment; and
    2. Subject to the reasonable convince of defendants and without 
restraint or interference from them, to interview, either informally or 
on the record, their officers, employees, and agents, who

[[Page 58775]]

may have counsel present, regarding any such matters.
    B. Upon the written request of the Attorney General of the 
Assistant Attorney General in charge of the Antitrust Division, made to 
defendants' principal offices, defendants shall submit such written 
reports, under oath if requested, with respect to any matter contained 
in the Final Judgment.
    C. No information or documents obtained by the means provided in 
Sections VII or X of this Final Judgment shall be divulged by a 
representative of the plaintiff to any person other than a duly 
authorized representative of the Executive Branch of the United States, 
except in the course or legal proceedings to which the United States is 
a party (including grand jury proceedings), or for the purpose of 
securing compliance with this Final Judgment, or as otherwise required 
by law.
    D. If at the time information or documents are furnished by 
defendants to plaintiff, defendant represent and identify in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and defendants mark each pertinent page of such 
material: ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then ten (10) calendar days notice, 
if practicable, shall be given by plaintiff to defendants prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding) to which each defendant is not a party.

XI. Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Final Judgment to apply to this Court at any 
time for such further orders and directions as may be necessary or 
appropriate for the construction or carrying out of this Final 
Judgment, for the modification of any of the provisions hereof, for the 
enforcement of compliance herewith, and for the punishment of any 
violations hereof.

XII. Termination

    Unless this Court grants an extension, this Final Judgment will 
expire upon the tenth anniversary of the day of its entry.

XIII. Public Interest

    Entry of this Final Judgment is in the public interest.
    Dated __________, 1998.
----------------------------------------------------------------------
United States District Judge

Schedule A

1. LWD and MWD Tools
    Subject to the other provisions of this Schedule A, HESI shall 
transfer to purchaser all of its LWD tools and such quantity of MWD 
tools as will allow purchaser to operate such LWD tools. Such LWD tools 
shall include the following tools:

------------------------------------------------------------------------
                                                            Approximate
                                                              current
                                                             quantity
------------------------------------------------------------------------
LWD:
  CWRGM Resistivity--GR Tool............................             111
  DNSC Density--Neutron Tool............................              53
  SCWR Slim Resistivity Tool............................              42
------------------------------------------------------------------------
  In order to allow purchaser to operate such LWD tools, HESI will
transfer the following MWD tools to purchaser:
------------------------------------------------------------------------
MWD:
  HDSM Directional Tool (positive pulse)                              95
  HDS1 MWD Kits (positive pulse)                                      17
  RX4 MLWD Surface System...............................              50
------------------------------------------------------------------------

    Included with such tools shall be the software required to operate 
such tools in their current mode of operation by HESI and a hard copy 
and copy of all computer tapes and discs containing any data in the 
possession or control of HESI (but not data owned by a customer unless 
the customer consents) that record the performance anywhere of those 
tools, together with instructions and all other materials necessary to 
use or interpret the data. HESI will use its best efforts to obtain the 
consent of customers who own such data that is in its possession or 
control.
2. Sonic Tools
    HESI shall transfer to purchaser 50% of its CLSS Sonic Tools 
(approximately 23 tools), 50% of its SCLSS Sonic (slim) Tools 
(approximately 9 tools), and 50% of its Sonic Workstations 
(approximately 7 workstations). HESI will also grant to purchaser a 
worldwide, royalty-free, irrevocable, non-exclusive license covering 
HESI's Intellectual Property for the use, manufacture and sale of such 
Sonic Tools. Such license will not be subject to any requirement to 
grant back to HESI rights to any improvements made by purchaser to such 
tools.
    Included with such tools shall be the software necessary to operate 
such tools in their current mode of operation by HESI and a hard copy 
and copy of all computer tapes and discs containing any data in the 
possession or control of HESI (but not data owned by a customer unless 
the customer consents) that record the performance anywhere of those 
tools, together with instructions and all other materials necessary to 
use or interpret the data. HESI will use its best efforts to obtain the 
consent of customers who own such data that is in its possession or 
control. HESI shall be permitted to offer Sonic LWD services worldwide 
using the Sonic LWD tools and workstations it retains. HESI shall be 
permitted to rent from purchaser sufficient other HESI LWD tools to 
allow it to provide sonic LWD services until such tine as HESI is able 
to adapt its sonic LWD tools to operate in real time with LWD tools 
acquired from Dresser Industries, Inc., but in any event not longer 
than 12 months after the merger of Halliburton Company and Dresser 
Industries, Inc. is consummated. To the extent and for the period that 
HESI retains LWD tools (other than sonic tools) for such purpose, it 
shall pay purchaser a reasonable rental amount for such retained tools.
3. Buildings
    (a) In the United States, the LWD Business is operated from the 
HESI-owned Lafayette, Louisiana service center, which is a 63,400 sq. 
ft. facility located on a 9.8 acre site, and configured for the storage 
of radioactive well logging sources. HESI shall transfer to purchaser 
the entire Lafayette facility, including all workshop, testing, and 
repair equipment required for the maintenance of the tools.
    (b) With respect to equipment and facilities located outside the 
United States which are used by HESI to conduct the LWD Business, HESI 
will transfer to purchaser all workshop, testing, and repair equipment 
used by HESI to conduct the LWD Business and such of the buildings HESI 
owns or leases which are used solely for purposes of conducting the LWD 
Business. Where HESI conducts its LWD Business from a facility that is 
also used by HESI for other purposes, HESI will transfer such workshop, 
testing and repair equipment to purchaser at a nearby facility of 
purchaser's selection which purchaser has acquired for such purpose. In 
those areas where, following the merger of Halliburton Company and 
Dresser Industries, Inc., a facility formerly used by one of the 
companies to provide LWD services will not be used by HESI to provide 
LWD services, purchaser will have the option to

[[Page 58776]]

acquire that facility from HESI as part of the LWD Business.
4. Manufacturing
    (a) HESI will transfer to purchaser manufacturing, assembly, 
testing, calibration and other machinery and equipment, including 
related software, to equip a building, to be supplied by purchaser, 
with sufficient equipment to permit purchaser to conduct the 
manufacturing, assembly, testing, and calibration of LWD tools and MWD 
tools used in conjunction with the LWD tools currently performed by 
HESI (with the exception of a test well). HESI will make its current 
test well in Fort Worth, TX available to purchaser for a period of two 
years for a charge not to exceed the amount charged by AMOCO at its 
test well in Catoosa, OK, which is available on a rental basis to the 
industry. This transferred equipment shall include HESI designed 
automated test equipment and accelerated stress screen test equipment, 
and standard injection molding equipment used to ``pott'' circuit 
boards in shock resistant elastomer. Also included will be a hydraulic 
shake table used to perform tool chassis testing. HESI will provide 
purchaser with copies of all drawings, histories, manuals, lab 
notebooks, blueprints, designs, design protocols, specifications for 
materials, specifications for parts and devices, and quality assurance 
control procedures and other records maintained by HESI related to the 
tools specified in paragraphs 1 and 2.
    (b) A reasonable number of employees whose qualifications are 
suited to conduct the management of the manufacturing, assembly, 
testing or calibration process will be selected by purchaser from a 
list HESI shall supply to purchaser of all of its skilled technical and 
management employees who work in the manufacturing, assembly, testing, 
or calibration of LWD tools and MWD tools used in conjunction with the 
LWD tools, which list shall include their expertise, qualifications, 
job descriptions, salary, date of hire, and all other information from 
the employee's personnel file that HESI can legally provide to 
purchaser. Purchaser will be responsible for offering such employees 
such compensation and benefit program as will induce such persons 
voluntarily to agree to leave HESI's employment and become employees of 
purchaser. HESI will use its best efforts to work with purchaser to 
make reasonable arrangements to cause such employees to accept such 
employment by purchaser.
    (c) If at the time of sale there exist continuing contract 
obligations of HESI to sell or maintain or support LWD tools previously 
sold to third-parties, HESI shall identify and purchaser shall assume 
such obligations.
5. R&D
    HESI will deliver to purchaser R&D equipment, including related 
software, and copies of tool histories, development records and 
laboratory records related to the LWD tools and MWD tools listed in 
paragraphs 1 and 2, including the results of unsuccessful designs. HESI 
will provide purchaser, at a location to be supplied by purchaser, a 
LWD research laboratory capable of conducting the research projects 
existing at any time on or after February 25, 1998 with respect to 
existing LWD or MWD tools or new tools that extend the technology 
contained in the tools listed in paragraphs 1 and 2. A reasonable 
number of employees whose technical qualifications are suited to 
conduct the types of LWD research and development purchaser wishes to 
conduct will be selected by purchaser from HESI's current LWD technical 
staff. HESI shall supply to purchaser a complete list of all its LWD 
technical staff members who have participated in any research projects 
with respect to LWD or MWD tools, including their expertise, 
qualifications, job descriptions, salary, date of hire, and all other 
information from the employee's personnel file that HESI can legally 
provide to purchaser. Purchaser will be responsible for offering such 
employees such compensation and benefit programs as will induce such 
persons voluntarily to agree to leave HESI's employment and become 
employees of purchaser. HESI will use its best efforts to work with 
purchaser to make reasonable arrangements to cause such employees to 
accept employment by purchaser.
6. Licenses
    (a) HESI will grant to purchaser a worldwide, royalty-free, 
irrevocable, non-exclusive license covering HESI owned Intellectual 
Property. Purchaser shall not be granted any rights, including 
trademarks and service marks, associated with the use of the trade 
names or commercial names of Halliburton or HES; provided, however, 
that in the marketing of LWD services using LWD or MWD tools acquired 
from HESI, purchaser will possess the right following the date of the 
purchase of the LWD Business to identify its LWD and MWD tools as being 
manufactured pursuant to a license from HESI and its LWD Business as 
having been acquired from HESI. Such license will not be subject to any 
requirement that purchaser grant back to HESI rights to any 
improvements made by purchaser to such tools.
    (b) HESI will grant to purchaser sublicenses covering the use of 
third-party technology and related software embodied in the transferred 
LWD and MWD tools and software, to the extent permitted by its licenses 
from such third parties. Such sublicenses will not be subject to any 
requirement that purchaser grant back to HESI rights to any 
improvements made by purchaser to such tools. To the extent that the 
third party licenses do not permit HESI to grant purchaser a 
sublicense, HESI will identify each such third party license and use 
its best efforts to assist purchaser in obtaining a license from the 
third party.
7. Contracts
    (a) At the time of sale, HESI will assign to purchaser all of its 
contracts with customers to provide LWD services in the United States, 
or to the extent applicable, portions of contracts to provide LWD 
services in the United States that are outstanding at closing. To the 
extent not assignable, HESI will use its best efforts to obtain for 
purchaser the benefit of such contracts by designating purchaser as 
HESI's agent for the purposes of performing such contracts and paying 
to purchaser all monies due under such contracts for the performance of 
such LWD services.
    (b) At the time of sale, HESI will assign to purchaser all of its 
contracts with customers to provide LWD Services outside the United 
States, or to the extent applicable, portions of contracts to provide 
LWD Services that are outstanding at closing. To the extent not 
assignable or to the extent that the assignment is unacceptable to the 
customer, in order to allow HESI to complete contracts existing at the 
time of sale any resulting from the award under a tender outstanding at 
the date of sale, HESI shall be allowed to rent from purchaser such LWD 
and MWD tools, and to use equipment and facilities of the LWD Business 
and such employees of the LWD Business as are reasonably required for 
HESI to complete the performance of LWD Services under such contracts. 
HESI shall pay to purchaser a reasonable rental amount for such tools, 
equipment, facilities, and employees during the period from the close 
of the sale of the LWD Business to the time such contracts are 
completed.

[[Page 58777]]

8. Employees
    Subject to the other terms of this Schedule A, HESI and purchaser 
will enter into commercially reasonable arrangements for purchaser to 
employ such of the employees of the LWD Business as purchaser requires 
to operate the LWD Business.
9. Customer Lists, Credit Records, and Supplied/Vendor Lists and 
Supplier/Vendor Contracts
    HESI will transfer to purchaser its lists of customers, customer 
credit records, and supplier/vendor lists and supplier/vendor contracts 
for its LWD Business anywhere in the world.
10. Technical Support and Training
    HESI will transfer to purchaser technical support and training 
services employees and related assets with respect to the LWD Business. 
Purchaser will be responsible for offering such employees such 
compensation and benefit programs as will induce such persons 
voluntarily to agree to leave HESI's employment and become employees of 
purchaser. HESI shall be permitted to utilize the services of 
sufficient technical support and training services employees and 
related assets to the extent required for HESI to complete the 
contracts referred to in paragraph 7(b). To the extent and for the 
period that HESI utilizes the services of technical support and 
training services employees and related assets, it shall pay purchaser 
a reasonable fee for those services.
11. Spare Parts
    HESI's inventory of spare parts and consumables relating to the LWD 
Business will be transferred to purchaser, provided, however, that the 
inventory of Sonic LWD tool parts shall be divided between HESI and 
purchaser in the same proportions as the Sonic tools are divided 
pursuant to paragraph 2. Purchase will agree to sell to HESI at 
reasonable prices spare parts sufficient to permit HESI to complete the 
contracts referred to in paragraph 7(b).
12. Continuing LWD Services
    HESI agrees that after the sale of the LWD Business it will not 
offer LWD services, directly or indirectly, including by a licensee 
other than purchaser, anywhere in the world using any of the HESI tools 
of the type sold to purchaser, except (i) LWD services necessary to 
complete the contracts referred to in paragraph 7(b); (ii) LWD services 
using LWD tools acquired from Dresser; and (iii) sonic LWD services 
using sonic LWD tools of the type sold to purchaser. Further, HESI may 
continue to use the underlying technology licensed to purchaser in its 
wireline logging tools and other products and in Dresser tools.
13. No Transfer of Acquired Assets
    HESI may require purchaser to agree that it will not transfer by 
any means any of the tangible or intangible property or assets it 
acquires from HESI to either Schlumberger Limited, or Baker Hughes 
Incorporated, or their affiliates for the life of the consent decree. 
This provision does not prevent purchaser from making the property or 
assets available to any joint venture in which it participated.
Excluded assets:
    Excluded from the LWD Business are (1) all business, assets and 
technology of Dresser Industries, Inc. which is being acquired by 
Halliburton; (2) all business, assets and technology of NUMAR; and (3) 
Intellectual Property, except to the extent provided in paragraphs 2 
and 6.

Certificate of Service

    I hereby certify that I have caused a copy of the foregoing 
Complaint and proposed Final Judgment to be served on counsel for 
defendants in this matter in the manner set forth below:
    By first class mail, postage prepaid, and by facsimile:

Helene D. Jaffe, Esquire, Weil, Gotshal & Manges, 767 Fifth Avenue, New 
York, NY 10153
Ky P. Ewing, Esquire, Vinson & Elkins, 1455 Pennsylvania Avenue, N.W., 
Washington, D.C. 20004-1008
Andrew K. Rosa,
Antitrust Division, U.S. Department of Justice, 325 Seventh Street, 
N.W., Suite 500, Washington, D.C. 20530, (202) 307-0886, (202) 616-2441 
(Fax).

Competitive Impact Statement

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16(b)-(h), 
files this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    On September 29, 1998, the United States filed a civil antitrust 
Complaint alleging that the proposed merger of Dresser Industries, Inc. 
(``Dresser'') and Halliburton Company (``Halliburton'') would violate 
Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The Complaint alleges 
that Halliburton and Dresser are two of only four companies that 
provide logging-while-drilling (``LWD'') services to oil and gas 
drilling companies and are the only sources of current and likely 
future innovations in new and improved LWD tools. The request for 
relief in the Complaint seeks: (1) a judgment that the proposed merger 
would violate Section 7 of the Clayton Act; (2) a permanent injunction 
preventing consummation of the merger agreement; (3) an award of costs 
to the plaintiff; and (4) such other relief as the Court may deem just 
and proper.
    When the Complaint was filed, the United States also filed a 
proposed settlement that would permit the merger of Halliburton and 
Dresser to proceed, but require a divestiture that will preserve 
competition in the market for provision of LWD services. This 
settlement consists of a Stipulation and Order and a proposed Final 
Judgment. The proposed Final Judgment orders defendants to divest ``the 
LWD business,'' which is described in Schedule A of the proposed Final 
Judgment, within one hundred and eighty (180) calendar days after the 
filing of the Final Judgment in this matter, or five (5) days after 
notice of the entry of the Final Judgment by the Court, whichever is 
later. The purchaser of the LWD Business must be acceptable to the 
Antitrust Division of the Department of Justice (``DOJ''). The LWD 
Business includes virtually all of Halliburton's LWD tools; sufficient 
measurement-while-drilling (``MWD'') tools for use with the LWD tools; 
manufacturing equipment; workshop, testing, and repair equipment used 
by Halliburton to conduct the LWD Business anywhere in the world; 
research and development equipment; Halliburton's Lafayette, Louisiana, 
facility and the option to acquire facilities outside the United States 
previously used by Halliburton or Dresser to provide LWD services that 
will not continue to be used by Halliburton; the right to hire 
employees of the LWD Business as the purchaser requires to operate the 
LWD business, including a reasonable number of employees to manage the 
manufacture, assembly, testing or calibration of LWD tools and 
associated MWD tools and to conduct LWD research and development; and 
worldwide, royalty-free, irrevocable licenses to the intellectual 
property used in connection with the use, manufacture, or sale of the 
transferred tools.
    The plaintiff and defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed final Judgment would terminate the action, except that the 
Court would retain jurisdiction to construe, modify, or enforce the

[[Page 58778]]

provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    Halliburton is a Delaware corporation, with its principal office in 
Dallas, Texas. It provides products and services for the exploration, 
development, and production of oil and natural gas. It is one of the 
``Big Four'' oil field service companies--along with Dresser and two 
other companies. In 1997, Halliburton had revenues of over $8 billion. 
Dresser is also a Delaware corporation headquartered in Dallas, Texas. 
In 1997, it reported total sales of about $7.5 billion.
    On February 25, 1998, Halliburton and Dresser entered into an 
Agreement and Plan of Merger under which Halliburton would merge with 
Dresser. This transaction, which would increase concentration in the 
already highly concentrated market for the provision of LWD services, 
precipitated the government's suit.

B. The LWD Service Market

    Oil and gas companies use data from LWD tools, which are placed 
behind the drill bit, to guide drilling operations, particularly in 
offshore drilling projects. The data from LWD tools, which is 
transmitted to the surface while the drilling is ongoing, allows the 
driller to evaluate the formation that the drill bit is cutting. With 
this data, the driller can detect changes in downhole pressure, prevent 
the drill bit from straying out or oil or gas deposits, and otherwise 
determine the optimum drilling path.
    There are four types of LWD tools, each of which provide different 
data to evaluate the formation: (1) gamma ray, (2) resistivity, (3) 
neutron density, and (4) sonic. Gamma ray tools, which are the most 
rudimentary LWD tools, identify the type of formation (e.g., shale or 
sand) by measuring natural radioactivity. Data from LWD resistivity 
tools help detect the presence of oil, gas, and water in the formation. 
Data from LWD neutron density and sonic tools help determine the 
formation's porosity, which indicates the amount of liquid in the 
formation and the formation's permeability.
    There are no realistic substitutes for LWD services for offshore 
drilling projects. Drillers can use wireline logging tools to gather 
similar data, but, in order to use wireline logging, they must cease 
drilling, remove the drill from the well, lower tools into the well by 
wire, collect data downhole, remove the tools, and read the data on the 
surface. During this entire operation, which may take as long as a day 
and a half, the drilling rig sits idle (costing the operator $250,000 
to $300,000 per day in deepwater areas of the Gulf of Mexico), which 
makes wireline logging much more expensive than LWD services. A small 
but significant and nontransitory increase in the price of LWD services 
would not cause a significant number of customers drilling offshore 
wells to switch to wireline services, or to any other method for 
obtaining formation evaluation data.

C. Harm to Competition as a Consequence of the Merger

    Halliburton and Dresser are two of only four firms that provide the 
full range of LWD services. The proposed transaction would reduce to 
three the number of firms providing the full range of LWD services in 
the United States.
    Moreover, successful entry into the market for provision of LWD 
services would be difficult, time-consuming, and costly. Even if a new 
entrant invested in the research, development, and engineering programs 
required to produce the current generation of LWD tools, it would also 
have to engage in extensive testing, and, over a course of years, 
eventually establish a reputation for quality and reliability--
particularly for customers drilling offshore for whom the costs of 
delay due to failure of LWD tools can be great.
    Halliburton and Dresser are also two of only four firms that are 
engaged in the research, development, and commercialization of new LWD 
tools. Competition between these firms to develop new and better LWD 
tools is important to oil and gas companies, in order to minimize the 
per-barrel cost of producing oil and gas. This competition has hastened 
the pace of innovation and given customers a variety of solutions to 
their formation evaluation needs.
    The Complaint alleges that the transaction would have the following 
effects, among others:
    a. Actual and potential competition between Halliburton and Dresser 
will be eliminated;
    b. Competition generally in the provision of LWD services will 
likely be substantially lessened;
    c. Prices for LWD services will likely increase; and
    d. Competition in the development, commercialization, and 
improvement of LWD tools will likely be substantially lessened.

III. Explanation of the Proposed Final Judgment

    The provisions of the proposed Final Judgment are designed to 
eliminate the anticompetitive effects of the proposed merger of 
Halliburton and Dresser.
    The proposed Final Judgment provides that, within one hundred and 
eighty (180) calendar days after the filing of the Final Judgment in 
this matter, or five (5) days after notice of the entry of the Final 
Judgment by the Court, whichever is later, defendants must divest the 
LWD Business to an acquirer acceptable to DOJ. If defendants fail to 
divest the LWD Business within this period, a trustee, selected by DOJ, 
will be appointed by the Court to sell the LWD Business.
    The Final Judgment provides that defendants will pay all costs and 
expenses of the trustee. After the trustee's appointment becomes 
effective, the trustee will file monthly reports with the parties and 
the Court, setting forth the trustee's efforts to accomplish 
divestiture. At the end of six months, if the divestiture has not been 
accomplished, the trustee and the parties will have the opportunity to 
make recommendations to the Court, which shall enter such orders as 
appropriate in order to carry out the purpose of the trust, including 
extending the trust and the term of the trustee's appointment.
    Section IV of the proposed Final Judgment requires defendants to 
divest ``the LWD Business' as an ongoing business to a purchaser 
acceptable to the United States in its sole discretion. ``The LWD 
Business'' is defined as Halliburton Energy Services, Inc.'s (``HESI'') 
worldwide business providing LWD Services and includes the tangible and 
intangible assets, obligations, and understandings set forth in 
Schedule A of the proposed Final Judgment.\1\
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    \1\ HESI is a wholly owned subsidiary of Halliburton. ``LWD 
Services'' means the services and products used to provide real-time 
logging-while-drilling formation evaluation data which is utilized 
to evaluate the formation characteristics of a given geologic 
formation. LWD Services also include MWD Services provided in 
conjunction with LWD Services. MWD tools are used when drilling non-
vertical wells to measure and transmit data from downhole during the 
drilling process on the inclination and azimuth of the downhole 
drilling tools. When LWD tools are used, the driller also uses MWD 
tools, and the driller usually obtains both types of tools from the 
same company because the MWD tools and LWD tools must be compatible.
---------------------------------------------------------------------------

    The assets to be divested include:
    (1) HESI's resistivity tools, density-neutron tools, and slim 
resistivity tools;
    (2) half of Halliburton's sonic tools and sonic workstations;
    (3) enough MWD tools to allow the purchaser to operate these LWD 
tools;

[[Page 58779]]

    (4) software required to operate the tools, information about tool 
performance history, and spare parts;
    (5) a building from which Halliburton currently supplies LWD 
services to U.S. offshore drilling projects;
    (6) equipment necessary to allow the buyer of the LWD Business to 
manufacture, assemble, test, and calibrate LWD and MWD tools,\2\
---------------------------------------------------------------------------

    \2\ Excluded from the divestiture package is HESI's test well. 
The purchaser will be able, for a fee, to use HESI's test well at 
Fort Worth, Texas, for two years.
---------------------------------------------------------------------------

    (7) worldwide, royalty-free, irrevocable, non-exclusive licenses to 
use HESI-owned intellectual property, and sublicenses covering the use 
of third-party technology and related software embodied in the 
transferred LWD and MWD tools and software, to the extent permitted by 
HESI's licenses from such third parties;
    (8) research and development equipment and development and 
laboratory records related to the LWD tools and MWD tools to be sold, 
including the results of unsuccessful designs;
    (9) all assignable contracts to provide LWD services worldwide, as 
well as lists of customers, customer credit records, and supplier/
vendor lists and supplier/vendor contracts; and
    (10) the opportunity to hire Halliburton employees to operate the 
LWD Business, including employees in manufacturing, research and 
development, and technical support and training services.
    After the sale of the LWD Business, defendants will not be able to 
offer LWD services using any of the tools of the type sold with the LWD 
Business, except for (i) LWD services necessary to complete existing 
contracts for which Halliburton will rent the tools from the purchaser; 
(ii) LWD services using LWD tools acquired from Dresser; and (iii) 
sonic LWD services using sonic LWD tools of the type sold to purchaser.
    Although the Complaint alleges the United States as the relevant 
geographic market, the proposed Final Judgment requires divestiture of 
the assets that Halliburton has used to provide LWD Services worldwide. 
Divestiture of the worldwide LWD business is necessary to preserve 
competition in the United States LWD services market because 
Halliburton, Dresser, and the other two major providers of LWD Services 
have worldwide operations that provide them a revenue base to support 
LWD research and development efforts. Thus, the divestiture is designed 
to ensure that the new buyer is viable and to put the purchaser in 
Halliburton's place as an international LWD company, enabling the 
purchaser to continue the innovation of LWD tools, which will benefit 
U.S. customers.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
Sec. 16(a), the proposed Final Judgment has no prima facie effect in 
any subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final 
Judgment

    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
sixty days of the date of publication of this Competitive Impact 
Statement in the Federal Register. The United States will evaluate and 
respond to the comments. All comments will be given due consideration 
by the Department of Justice, which remains free to withdraw its 
consent to the proposed Judgment at any time prior to entry. The 
comments and the response of the United States will be filed with the 
Court and published in the Federal Register. Written comments should be 
submitted to: Roger W. Fones, Chief, Transportation, Energy & 
Agriculture Section, Antitrust Division, United States Department of 
Justice, 325 Seventh Street, NW., Suite 500, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against Halliburton and 
Dresser. The United States is satisfied that the divestiture of the 
described assets specified in the proposed Final Judgment will 
facilitate continued viable competition in the market for the provision 
of LWD services. The United States is satisfied that the proposed 
relief will prevent the merger from having anticompetitive effects in 
this market. The divestiture of the LWD Business will preserve the 
structure of the market for the provision of LWD services that existed 
prior to the merger and will preserve the existence of an independent 
competitor.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty-day comment 
period, after which the court shall determine whether entry of the 
proposed Final Judgment ``is in the public interest.'' In making that 
determination, the court may consider--

    (1) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) The impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trail.

15 U.S.C. Sec. 16(e). As the Court of Appeals for the District of 
Columbia Circuit held, the APPA permits a court to consider, among 
other things, the relationship between the remedy secured and the 
specific allegations set forth in the government's complaint, whether 
the decree is sufficiently clear, whether enforcement mechanisms are 
sufficient, and whether the decree may positively harm third parties. 
See United States v. Microsoft, 56 F.3d 1448 (D.C. Cir. 1995).
    In conducting this inquiry, ``the Court is nowhere compelled to go 
to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly

[[Page 58780]]

settlement through the consent decree process.'' \3\ Rather,

    \3\ 119 Cong. Rec. 24598 (1973). See also United States v. 
Gillette Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public 
interest'' determination can be made properly on the basis of the 
Competitive Impact Statement and Response to Comments filed pursuant 
to the APPA. Although the APPA authorizes the use of additional 
procedures, 15 U.S.C. Sec. 16(f), those procedures are 
discretionary. A court need not invoke any of them unless it 
believes that the comments have raised significant issues and that 
further proceedings would aid the court in resolving those issues. 
See H.R. 93-1463, 93rd Cong. 2d Sess. 8-9, reprinted in (1974) U.S. 
Code Cong. & Ad. News 6535, 6538.
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absent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para. 
61,508, at 71,980, (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v, BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel 
Corp., 648 F. 2d 660, 666 (9th Cir.), cert denied, 454 U.S. 1083 
(1981). Precedent requires that

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\4\

    \4\ United States v. Bechtel, 648 F.2d at 666 (internal 
citations omitted) (emphasis added); see United States v. BNS, Inc., 
858 F.2d at 463; United States v. National Broadcasting Co., 449 F. 
Supp. 1127, 1143 (C.D. Cal. 1978); Gillette, 406 F. Supp. at 716. 
See also United States v. American Cyanamid Co., 719 F.2d 558, 565 
(2d Cir. 1983).
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    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest.' (citations 
omitted).'' \5\
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    \5\ United States v. American Tel & Tel. Co., 552 F. Supp. 131, 
150 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460 
U.S. 1001 (1983), quoting Gillette, 406 F. Supp. at 716; United 
States v. Alcan Aluminium, Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 
1985).
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VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

    For Plaintiff United States of America:

    Dated: October 21, 1998.

      Respectfully submitted,
Angela L. Hughes,
Trial Attorney, U.S.C. Department of Justice, Antitrust Division, 325 
Seventh Street, N.W., Suite 500, Washington, DC 20530, Telephone: (202) 
307-6410 or (202) 307-6351, Facsimile: (202) 307-2784.

Certificate of Service

    I hereby certify that on this 21st day of October, 1998, I have 
caused a copy of the foregoing Competitive Impact Statement to be 
served on counsel for defendants in this matter by first class mail, 
postage prepared, and by facsimile.
    Counsel for Defendant Halliburton Company:

Ky P. Ewing, Jr., Esquire, Vinson & Elkins, 1455 Pennsylvania Avenue, 
N.W., Washington, D.C. 20004-1008, Telephone (202) 639-6580, Facsimile: 
(202) 639-6604

    Counsel for Defendant Dresser Industries, Inc.:

Helene D. Jaffe, Esquire, Weil, Gotshal & Manges, 767 Fifth Avenue, New 
York, NY 10153, Telephone: (212) 310-8572, Facsimile: (212) 310-8007.
Angela L. Hughes,
Antitrust Division, U.S. Department of Justice, 325 Seventh Street, 
N.W., suite 500, Washington, D.C. 20530, Telephone: (202) 307-6410, 
Facsimile: (202) 307-2784.
[FR Doc. 98-29222 Filed 10-30-98; 8:45 am]
BILLING CODE 4410-11-M