Engine Capital has called on engineering and construction group KBR Inc to consider a full sale of the business, arguing that the company is undervalued in public markets and could command a significantly higher price in a takeover, according to a report by Reuters.
The activist investor, which has built a stake of roughly 2% in KBR, has reportedly written to the company’s board suggesting that a sale process could deliver greater value than the firm’s current strategic plan, including its ongoing restructuring efforts.
According to the letter cited in reports, Engine Capital founder and portfolio manager Arnaud Ajdler argued that KBR’s planned corporate separation introduces unnecessary complexity and execution risk. Instead, he advocated for a full-company transaction, suggesting potential buyers could include both private equity firms and strategic acquirers.
The activist estimates that KBR could fetch between $48 and $55 per share in a sale, well above recent trading levels. The company’s shares closed at $36.02, valuing the business at approximately $4.6bn, and are down more than 10% so far this year.
KBR has already been working through a major portfolio reshaping. The company is in the process of separating its Mission Technology Solutions unit, which provides services to military and government clients. That spin-off is expected to be completed in 2026.
Following the separation, KBR plans to focus on its KBR Sustainable Technology Solutions business, which targets energy transition and emissions reduction projects.
Engine Capital, however, has warned that breaking up the company could reduce clarity for investors and add tax and operational complexity, potentially eroding shareholder value rather than enhancing it.
Ajdler argued that a full acquisition would instead provide an immediate and cleaner path to value realisation, while removing execution risks and ongoing restructuring costs.
KBR has been a recurring target for activist investors in recent years. In 2024, Irenic Capital Management also built a stake in the company and pushed for similar strategic changes, including business separation initiatives.
The latest intervention adds to growing shareholder pressure on the Houston-based contractor, which operates across government services and energy-related engineering markets.
