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| Definitive Agreements Signed for Marathon, Ashland Joint Venture |
FINDLAY, Ohio, Dec. 12 /PRNewswire/ -- Thomas J. Usher, chairman of USX
Corporation, Victor G. Beghini, president of Marathon Oil, and Paul W.
Chellgren, Ashland chairman and chief executive officer, signed definitive
agreements today that will formally create Marathon Ashland Petroleum LLC.
Marathon has a 62 percent interest and Ashland a 38 percent interest in the
new company which is expected to commence operations January 1, 1998.
Plans to pursue the joint venture were first announced last May 15 when a
letter of intent to seek a combination of the major elements of the two firms'
downstream operations was signed. As announced on December 8, the Federal
Trade Commission has advised both companies that it has completed the
antitrust review of their refining and marketing joint venture announced
earlier this year, and will permit the transaction to proceed.
Potential efficiencies to be derived by the joint venture have been
broadly estimated to be in excess of $200 million annually on a pre-tax basis.
While a modest part of these efficiencies will begin to be achieved in mid- to
late 1998, full realization of efficiencies should occur over the next few
years as the joint venture's integration plans are implemented. Certain
transition costs, principally severance and relocation, will be incurred by
both parents in connection with the formation of the new company; however,
these one-time costs are not expected to be significant, nor are any major
asset dispositions anticipated in connection with the combination at this
time.
"Today's signing represents the culmination of months of comprehensive
planning and discussion and reflects the efforts of hundreds of dedicated
Marathon, USX and Ashland employees. More importantly, this signing
represents the creation of a new company, one well-suited to the demands of a
changing market," Usher stated. "The prospect of combining complementary
assets and integrating marketing and operations strengths through Marathon
Ashland Petroleum LLC is extremely exciting. I expect the joint venture to be
a formidable competitor."
"We're very pleased that the definitive agreements have been signed," said
Chellgren. "Marathon, USX and Ashland employees are to be commended for the
hard work, dedication and aggressive pace that they've maintained toward
building one of the strongest and most competitive downstream companies in the
industry. It's our goal to close the transaction as near to year-end as
possible and integrate the operations of the two companies as soon as
possible."
J.L. "Corky" Frank, Marathon's executive vice president for refining,
marketing and transportation, will be president of the joint venture and
D. Duane Gilliam, Ashland Petroleum president, will be executive vice
president. Other officers of the joint venture from both companies have also
been announced. Headquarters for Marathon Ashland Petroleum will be located
in Findlay, Ohio.
"This signing combines the downstream resources of two outstanding parent
companies in an exciting growth-oriented venture," Frank said. "I see the
potential for significantly enhancing the value provided to customers and
other stakeholders through the joint venture's economies of scale, feedstock
purchasing, market access, and refining/transportation flexibility. But the
most important resource of all is our employees," he emphasized. "Innovation
and performance derives from people. Because of the caliber of our people, I
have no doubt that our performance will grow to be best of class."
Marathon and Ashland have agreed that exploration, production and chemical
businesses are not to be part of the joint venture. Ashland's
refinery-produced petrochemicals will be included in the joint venture. Other
exclusions include Ashland's Valvoline division, along with certain Marathon
equity investments in pipelines.
Plans are to continue employing the existing brands that each of the
parent companies have utilized successfully. In the future, the joint venture
will develop a brand strategy that will maximize the market impact of the
brand offering. Marathon operates under the Marathon brand and through its
Emro Marketing Company brands: Speedway, Bonded, Cheker, Starvin' Marvin,
United, Gastown, Wake Up and Kwik Sak. Ashland brands include: Ashland,
SuperAmerica and Rich Oil.
Marathon Ashland Petroleum LLC will have approximately six percent of
total U.S. refining capacity with seven plants located at Garyville, LA,
(255,000 b/d); Catlettsburg, KY, (220,000 b/d), Robinson, IL (180,000 b/d);
St. Paul Park, MN (70,000 b/d); Texas City, TX (70,000 b/d); Detroit, MI
(70,000 b/d); and Canton, OH (70,000 b/d). The new company will have 84 light
products and asphalt terminals in the Midwest and Southeast regions of the
United States, 5,400 retail marketing outlets in 20 states, and significant
pipeline holdings. On a pro forma basis, the joint venture's combined total
assets would have been roughly $7 billion at the end of 1996 and reported
sales revenues for 1996 would have been approximately $20 billion, which
includes approximately $7 billion of excise taxes and matching buy/sell
transactions.
Marathon Oil Company is a part of the USX-Marathon Group (NYSE: MRO), a
unit of USX Corporation. Ashland Inc. (NYSE: ASH) is a large energy and
chemical company engaged in petroleum refining and marketing; coal and highway
construction.
For more information on Marathon, see the website at
http://www.marathon.com or http://www.usx.com .
For more information on Ashland, see the website at http://www.ashland.com
This press release includes forward-looking statements, particularly
concerning the amount of savings from potential efficiencies. These
statements contain the words "expected," "potential," or "estimated,"
indicating that future outcomes are not known with certainty and subject to
risk factors. Some factors that could potentially cause actual outcomes to
differ materially from information set forth in the forward-looking statements
include: unanticipated costs to implement shared technology, difficulties in
integrating corporate structures, delays in leveraging volume procurement
advantages or delays in personnel rationalization. In addition, in accordance
with the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995, USX has included in its Form 10-Q for the period ended March 31,
1997, meaningful cautionary statements identifying important factors, but not
necessarily all factors, that could cause actual results to differ materially
from those set forth in the forward-looking statements.
Marathon Ashland Petroleum LLC
Marathon Facts Ashland Facts Marathon Ashland
Petroleum LLC Facts
Marathon Oil Company Ashland Inc. Marathon Ashland
P.O. Box 3128 P.O. Box 391 Petroleum LLC
Houston, TX 77253-3128 Ashland, KY 41114 539 South Main St.
713-629-6600 Phone 606-329-3333 Phone Findlay, OH
713-871-0728 FAX 606-329-3922 FAX 45840-3295
419-422-2121 Phone
419-421-2540 FAX
J. L. "Corky" Frank, D. Duane Gilliam, J. L. "Corky" Frank,
Executive Vice President, President, President
refining, marketing and Ashland Petroleum D. Duane Gilliam,
transportation Company Executive Vice
President
Riad N. Yammine, President,John F. Pettus, President Riad N. Yammine,
Emro Marketing Company SuperAmerica President, Emro
Manfred Spindler, VP, Randy K. Lohoff, VP, Marketing Company
refining human resources John F. Pettus,
Kevin M. Henning, VP, J. Michael Wilder, VP President,
supply and transportation and General Counsel SuperAmerica
Richard E. White, VP, Lamar M. Chambers, Admin. Manfred Spindler,
marketing VP, finance Sr. VP, refining
Garry L. Peiffer, Kevin M. Henning,
Assistant Controller, Sr. VP, crude oil
refining, marketing and product supply
and transportation and transportation
Rodney P. Nichols, Manager, Richard E. White,
human resources Sr. VP, wholesale
Gary R. Heminger, Manager, and brand marketing
business development and Garry L. Peiffer,
joint interest, planning Sr. VP, finance
Clifford C. Cook, Manager, and commercial
operations planning and services
products supply Randy K. Lohoff,
Sr. VP, human
resources and
health, environment
and safety
J. Michael Wilder,
General Counsel and
Secretary
Lamar M. Chambers,
VP, finance and
controller
Rodney P. Nichols,
VP, human resources
Gary R. Heminger,
VP, business
development
Clifford C. Cook,
VP, operations
planning and
product supply
Marathon Refineries (4) Ashland Refineries (3) Marathon Ashland
Petroleum LLC
Refineries (7)
Garyville, LA Garyville, LA
Capacity: 255,000 bpd Capacity: 255,000 bpd
Catlettsburg, KY Catlettsburg, KY
Capacity: 220,000 bpd Capacity: 220,000 bpd
Robinson, IL Robinson, IL
Capacity: 180,000 bpd Capacity: 180,000 bpd
St. Paul Park, MN St. Paul Park, MN
Capacity: 70,000 bpd Capacity: 70,000 bpd
Detroit, MI Detroit, MI
Capacity: 70,000 bpd Capacity: 70,000 bpd
Canton, OH Canton, OH
Capacity: 70,000 bpd Capacity: 70,000 bpd
Texas City, TX Texas City, TX
Capacity: 70,000 bpd Capacity: 70,000 bpd
Total Marathon Total Ashland Total Marathon Ashland
Capacity: Capacity: Petroleum LLC
Combined Capacity:
575,000 bpd 360,000 bpd 935,000 bpd
Marathon percent Ashland percent Total Marathon Ashland
of U.S. Capacity: of U.S. Capacity: Petroleum LLC percent
of U.S. Capacity:
3.7 2.3 6.0
Marathon Terminals Ashland Terminals Marathon Ashland
Petroleum LLC
Terminals
51 light product and 34 light product and 84 light product and
asphalt terminals in asphalt terminals asphalt terminals.
the Midwest and Southeast (One light product
facility in Niles, MI,
is jointly owned)
Marathon Retail Ashland Retail Marathon Ashland
Marketing Marketing Petroleum LLC
Retail Marketing
Approximately 4,000 1,413 outlets in 11 Approximately 5,400
outlets in 17 states states including: outlets in 20 states
including: IL, IN, KY, MN, ND, OH, including: AL, FL,
AL, FL, GA, IL, IN, KY, PA, SD, VA, WV, and WI GA, IL, IN, KY, LA,
LA, MI, MS, NC, OH, PA, MI, MN, MS, NC, ND,
SC, TN, VA, WV, and WI OH, PA, SC, SD, TN,
VA, WV, and WI
Marathon Pipeline Ashland Pipeline Marathon Ashland
Petroleum LLC Pipeline
Marathon owns, leases, Ashland owns, leases or Owns, leases or has
or has an ownership has an ownership an ownership interest
interest in 5,635 miles interest in 5,790 miles in 10,651 miles
of pipeline that will of pipeline in 13 of pipeline. This
be included in the states. This includes total reflects both
joint venture. This 2,287 miles of crude Ashland's and
includes 878 miles of oil gathering lines, Marathon's
crude oil gathering 2,987 miles of crude joint interests in
lines; 2,434 miles of oil trunk lines, 667 miles of Capline,
crude oil trunk lines; 475 miles of product the large pipeline
and 2,323 miles of lines and 41 miles that transports crude
product lines of natural gas oil from St. James,
liquid lines LA, to Patoka, IL,
and both companies'
interests in the 107
miles of pipeline in
the Louisiana Offshore
Oil Port (LOOP) system
Visit USX Corporation's web site at http://www.usx.com. USX Corporation
press releases are available through Company News On-Call by fax,
800-758-5804, ext. 929150, or at http://www.prnewswire.com.
SOURCE USX-Marathon Group
back to topRelated links:
William E. Keslar of USX, 412-433-6870, or
Dan Lacy of Ashland, 606-329-3148
CNOC: http://www.prnewswire.com or fax, 800-758-5804, ext.
929150
