USX Announces Plan of Reorganization

Apr 24, 2001, 01:00 ET from USX Corporation

    COLUMBUS, Ohio, April 24 /PRNewswire Interactive News Release/ -- 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.
     In connection with the plan of reorganization, USX also announced that
 interested shareholders, investors and others may listen to the company's
 conference call with securities analysts at 2 p.m. EDT today on the USX
 Corporation web site.
     Usher and Kenneth L. Matheny, vice president-Investor Relations for USX,
 will host the call.  Interested parties can visit the web site at
 http://www.usx.com and click on the "Investor Services" button.
     Replays of the conference call will be available on the USX web site until
 May 1.
     Financial information, including earnings releases and other
 investor-related material, is also available at the site.
 
     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.
 
     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/comp/929150.html.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X22778718
 
 

SOURCE USX Corporation
    COLUMBUS, Ohio, April 24 /PRNewswire Interactive News Release/ -- 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.
     In connection with the plan of reorganization, USX also announced that
 interested shareholders, investors and others may listen to the company's
 conference call with securities analysts at 2 p.m. EDT today on the USX
 Corporation web site.
     Usher and Kenneth L. Matheny, vice president-Investor Relations for USX,
 will host the call.  Interested parties can visit the web site at
 http://www.usx.com and click on the "Investor Services" button.
     Replays of the conference call will be available on the USX web site until
 May 1.
     Financial information, including earnings releases and other
 investor-related material, is also available at the site.
 
     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.
 
     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/comp/929150.html.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X22778718
 
 SOURCE  USX Corporation

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