P. M. BRIEFING : Dresser Not Merging With Smith

Dresser Industries Inc., a major energy services concern, has called off a merger pact with Smith International Inc. that would have given Dresser more than a third of the domestic market in oil field tools and services.

Dresser did not disclose why the planned merger, which valued Smith at about $465 million, was terminated late Thursday. Stock arbitragers speculated that the deal was derailed on worries that Washington would block the merger for antitrust reasons.

In early afternoon trading today, Dresser fell $1.25 to $44.50 and Smith fell 87.5 cents to $12.50. Asked why both stocks dropped, an arbitrager said, “It (the merger) would have been ideal for both companies.”