Marathon Oil Corp – ‘425’ on 5/7/01 re: Marathon Oil Corp

On:  Monday, 5/7/01, at 4:32pm ET   ·   Accession #:  101778-1-500015   ·   File #:  1-05153

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Business-Combination Transaction Communication   —   Rule 425
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 425         Business-Combination Transaction Communication         3±    15K 


                                                        Filed by USX Corporation
                           Pursuant to Rule 425 under the Securities Act of 1933
                                        And deemed filed pursuant to Rule 14a-12
                                          Of the Securities Exchange Act of 1934
                                                Subject Company: USX Corporation
                                                      Commission File No. 1-5153

USX ANNOUNCES PLAN OF REORGANIZATION                                            

       COLUMBUS, Ohio, April 24 - USX Corporation today announced that its
board of directors authorized management to proceed with the necessary steps to 
implement a plan of reorganization of the corporation in order to separate the  
energy and steel businesses: USX-Marathon Group (NYSE: MRO) and USX-U. S. Steel 
Group  (NYSE: X).                                                               
      Thomas J. Usher, chairman and chief executive officer, will inform
shareholders at the firm's 100th annual meeting here that the plan, which is    
expected to be implemented at year-end, will create two strong, independent     
companies prepared to grow and prosper in each of their rapidly changing        
industries.                                                                     
         The plan envisions a tax-free spin-off of the steel and steel-related
businesses of USX Corporation into a freestanding, publicly traded company to be
known as United States Steel Corporation.  Holders of current USX-U. S. Steel   
Group common stock would become holders of United States Steel Corporation      
common stock.  Holders of current USX-Marathon Group common stock would become  
holders of Marathon Oil Company common stock.  The plan does not contemplate a  
cash distribution to shareholders.                                              
         In November 2000, the USX board of directors authorized management to
retain financial, tax and legal advisors to undertake a comprehensive review of 
the corporation's capital structure.  In commenting on the plan Usher stated,   
"In this regard, Credit Suisse First Boston and Salomon Smith Barney reviewed   
many options that would be available to the board in an effort to make Marathon 
and U. S. Steel more competitive in their industries and to enhance shareholder 
value for holders of both classes of our common stock.  Based in part upon the  
advice of the advisors, the board believes that a tax-free spin-off of our steel
business is in the best interest of all of our shareholders."                   
       Usher explained that separating Marathon and U. S. Steel would give
each company more flexibility in expanding its business through stock-based     
acquisitions, which would be highly beneficial in view of the global            
consolidation taking place in both the energy and steel industries.  Usher said 
that the separation would allow each "new company" to focus its attention and   
financial resources on its core business.  It would allow Marathon and          
U. S. Steel to each make needed acquisitions based solely on its own business   
considerations rather than on business issues related to a combined energy and  
steel company.  The separation would give each company independent access to    
financial markets and align the liability risks with each business. The USX     
board believes that shareholder value for the holders of each of Marathon and   
U. S. Steel would be enhanced as a result.                                      
       Usher noted that each new company would carry with it approximately
the same assets and liabilities now associated with its existing business,      
except for a value transfer of approximately $900 million from Marathon to U. S.
Steel, intended to maintain U. S. Steel as a strong, independent company.  The  
form of the $900 million value transfer would be a reallocation of USX corporate
debt between the current Marathon Group and U. S. Steel Group.  It is planned   
that all public debt that remains outstanding will remain with Marathon.  It is 
anticipated that both companies would have adequate access to financial markets 
with Marathon expected to have an investment grade rating at the current USX    
level or higher and U. S. Steel expected to have a slightly below investment    
grade rating.  As part of the transaction, transition expenses as well as other 
separation costs will be allocated between the two new companies.               
     Employees of both U. S. Steel and Marathon and the communities in
which they are located should not be adversely affected by the reorganization   
plan.  In addition, retirees from all units will continue to receive pension    
benefits from the existing fully funded plans and no changes in any retiree     
benefit will result from this reorganization, according to Usher.  Marathon will
continue to be headquartered in Houston, Marathon Ashland Petroleum in Findlay, 
Ohio and U. S. Steel in Pittsburgh.                                             
       Under the reorganization plan, Usher will become chairman and chief
executive officer of U. S. Steel. He will become chairman of Marathon Oil       
Company and remain chairman of the Marathon Ashland Petroleum LLC board of      
managers.  Clarence P. Cazalot, Jr. will become president and chief executive   
officer of Marathon Oil Company.  The balance of the management team of each    
entity is expected to remain substantially the same as it is today.             
         Usher said that the plan of reorganization is subject to the approval
of a majority of the outstanding shares of each class of the current USX common 
stock at a special meeting of shareholders, which is expected to be held early  
in the fourth quarter of this year.                                             
He added that the reorganization is subject to several other
conditions, including receipt of a favorable tax ruling from the Internal       
Revenue Service (IRS) on the tax-free nature of the transaction, completion of  
necessary financing arrangements and receipt of necessary regulatory and third  
party consents, and board approval of definitive documentation for the          
transaction.  The transaction is expected to occur at year-end, subject to the  
absence of any materially adverse change in business conditions for the energy  
and/or steel business, delay in obtaining the IRS ruling or other unfavorable   
circumstances.                                                                  
         "We are extremely enthusiastic about this plan and we believe that as
a result, both the energy and steel operations of USX will be well-positioned to
succeed and prosper," Usher said.                                               

 * * * * *

          The foregoing contains "forward-looking statements" which are based on
(1) a number of assumptions concerning future events made by management and (2) 
information currently available to management.  Readers are cautioned not to put
undue reliance on such forward-looking statements, which are not a guarantee of 
performance and are subject to a number of uncertainties and other facts, many  
of which are outside USX Corporation's control, that could cause actual events  
to differ materially from such statements.  For a more detailed description of  
the factors that could cause such a difference, please see USX Corporation's    
filings with the Securities and Exchange Commission.  There are also a number of
uncertainties, risks, conditions and other factors which could prevent the      
implementation of the above described plan of reorganization.                   
        In connection with the above described transactions, USX Corporation
intends to file a proxy statement and other materials with the Securities and   
Exchange Commission.  Security holders are urged to read these materials when   
they become available because they will contain important information.          
Investors and security holders may obtain a free copy of these materials when   
they become available as well as other materials filed with the Securities and  
Exchange Commission concerning USX Corporation at the Securities and Exchange   
Commission's website at http://www.sec.gov.  In addition, these materials and   
other documents may be obtained for free from USX Corporation by directing a    
request to USX Corporation at 600 Grant Street, Pittsburgh, PA  15219; Attn:    
Investor Relations.                                                             
      USX Corporation and its officers and directors may be deemed to be
participants in the solicitation of proxies from USX Corporation's stockholders 
with respect to these transactions.  Information regarding such officers and    
directors is included in USX Corporation's proxy statement for its 2001 annual  
meeting of stockholders filed with the Securities and Exchange Commission on    
March 12, 2001.  This document is available free of charge at the SEC's internet
site or from USX Corporation as described above.                                

Corporate Structure Chronology                                                  

2/25/1901 United States Steel Corporation is incorporated.  The new company     
          combines the steel businesses of J. P. Morgan and Andrew Carnegie into
the first billion dollar corporation.                       

3/11/1982 United States Steel Corporation acquires Marathon Oil Company.        
Marathon becomes a subsidiary of U. S. Steel.               

2/11/1986 United States Steel Corporation and Texas Oil & Gas Corp. (TXO)       
complete merger.  TXO becomes a subsidiary of U. S. Steel.  

7/9/1986  United States Steel Corporation becomes USX Corporation.  The         
          corporation has four business units: Marathon Oil Company, Texas Oil &
    Gas Corp., USS (the steel business of USX) and U. S. Diversified
Group.                                                      

5/7/1991  Following shareholder approval the previous day, USX-Marathon Group   
     (MRO) and USX-U. S. Steel Group (X) begin trading.  Each stock is
    intended to track the performance of the specific business unit.

9/25/1992 The former Delhi Gas Pipeline Corporation business is created from the
        Marathon Group as a new tracking stock called USX-Delhi Group (DGP).

1/26/1998 Delhi Group stock redeemed after Delhi companies sold to Koch         
Industries.                                                 

11/30/2000 USX announces study of its targeted stock structure.                 

4/24/2001 USX announces that the board of directors authorizes management to    
       implement a plan of reorganization to separate the energy and steel
businesses into Marathon Oil Company and United States Steel
Corporation.                                                

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘425’ Filing		Date		Other Filings
Filed on:		5/7/01		425
		3/12/01		10-K,  DEF 14A
				List all Filings