UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 18, 2004
ASHLAND INC.
(Exact name of registrant as specified in its charter)
Kentucky
(State or other jurisdiction of incorporation)
1-2918 61-0122250
(Commission File Number) (I.R.S. Employer Identification No.)
50 E. RiverCenter Boulevard, Covington, Kentucky 41012-0391
(Address of principal executive offices) (Zip Code)
P.O. Box 391, Covington, Kentucky 41012-0391
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code (859) 815-3333
Item 5. Other Events
On March 19, 2004 Ashland Inc. ("Ashland") announced that it signed an
agreement under which Ashland will transfer its 38 percent interest in
Marathon Ashland Petroleum LLC ("MAP") and two other businesses to Marathon
Oil Corporation in a transaction structured to be tax free and valued at
approximately $3.0 billion. The two other businesses are Ashland's maleic
anhydride business and 61 Valvoline Instant Oil Change ("VIOC") centers in
Michigan and northwest Ohio, which are valued at $94 million.
Under the terms of the agreement, Ashland's shareholders would receive
Marathon common stock with a value of $315 million (or approximately $4.50 per
Ashland share based on the number of shares currently outstanding). Ashland
would receive cash and MAP accounts receivable totaling $2.7 billion. MAP will
not make quarterly cash distributions to Ashland and Marathon between now and
the closing of the transaction. As a result, the final amount received by
Ashland would be increased by an amount equal to 38 percent of the cash
accumulated from operations during the period prior to closing. Ashland would
use a substantial portion of the transaction proceeds to retire all or most of
the company's outstanding debt and certain other financial obligations. After
payment of these obligations, Ashland would have a material net cash position.
The transaction is subject to, among other things, approval by Ashland's
shareholders, customary antitrust review, consent from public debt holders and
receipt of a favorable private letter ruling from the Internal Revenue Service
with respect to the tax treatment of the transaction. There is meaningful risk
that the transaction will not receive the favorable ruling from the IRS, in
which case the transaction would not proceed. However, Ashland believes it is
more likely than not that this transaction will receive a favorable ruling. If
these conditions are met, the transaction is expected to close by the end of
the 2004 calendar year.
The foregoing description of the transaction is qualified in its entirety
by reference to the terms of the agreements which are filed as Exhibits to
this Form 8-K and are incorporated by reference herein.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements include those that refer to Ashland's
operating performance and expectations about this transaction, including those
statements that refer to the expected benefits of the transaction to Ashland's
shareholders. Although Ashland believes its expectations are based on
reasonable assumptions, it cannot assure the expectations reflected herein
will be achieved. These forward-looking statements are based upon internal
forecasts and analyses of current and future market conditions and trends,
management plans and strategies, weather, operating efficiencies and economic
conditions, such as prices, supply and demand, cost of raw materials and legal
proceedings and claims (including environmental and asbestos matters) and are
subject to a number of risks, uncertainties and assumptions that could cause
actual results to differ materially from those we describe in the
forward-looking statements. The risks, uncertainties and assumptions include
the possibility that Ashland will be unable to fully realize the benefits
anticipated from the transaction; the possibility of failing to receive a
favorable ruling from the Internal Revenue Service; the possibility that
2
Ashland fails to obtain the approval of its shareholders; the possibility that
the transaction may not close or that Ashland may be required to modify some
aspect of the transaction to obtain regulatory approvals; and other risks that
are described from time to time in the Securities and Exchange Commission
reports of Ashland. Other factors and risks affecting Ashland are contained in
Ashland's Form 10-K, as amended, for the fiscal year ended Sept. 30, 2003,
filed with the Securities and Exchange Commission ("SEC") and available in
Ashland's Investor Relations website at www.Ashland.com/investors or the SEC's
website at www.sec.gov. Ashland undertakes no obligation to subsequently
update or revise the forward-looking statements made in this report to reflect
events or circumstances after the date of this report.
ADDITIONAL INFORMATION ABOUT THE TRANSACTION
Investors and security holders are urged to read the proxy
statement/prospectus regarding the proposed transaction when it becomes
available because it will contain important information. The proxy
statement/prospectus will be filed with the SEC by Ashland, and security
holders may obtain a free copy of the proxy statement/prospectus when it
becomes available, and other documents filed with the SEC by Ashland, at the
SEC's website at www.sec.gov. The proxy statement/prospectus, and other
documents filed with the SEC by Ashland, may also be obtained for free in the
SEC filings section on Ashland's Investor Relations website at
www.Ashland.com/investors, or by directing a request to Ashland at 50 E.
RiverCenter Blvd., Covington, KY 41012. The respective directors and executive
officers of Ashland and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction. Information
regarding Ashland's directors and executive officers is available in its proxy
statement filed with the SEC by Ashland on December 8, 2003. Investors may
obtain information regarding the interests of participants in the solicitation
of proxies in connection with the transaction referenced in the foregoing
information by reading the proxy statement/prospectus when it becomes
available.
Item 7. Financial Statements and Exhibits
(a) Financial Statements
None.
(b) Pro Forma Financial Information
None.
(c) Exhibits
2.1 Master Agreement dated as of March 18, 2004, among Ashland Inc., ATB
Holdings Inc., EXM LLC, New EXM Inc., Marathon Oil Corporation, Marathon
Oil Company, Marathon Domestic LLC and Marathon Ashland Petroleum LLC
(the "Master Agreement").
10.1 Tax Matters Agreement dated as of March 18, 2004, among Ashland Inc., ATB
Holdings Inc., EXM LLC, New EXM Inc., Marathon Oil
Corporation, Marathon Oil Company, Marathon Domestic LLC and Marathon
Ashland Petroleum LLC.
10.2 Assignment and Assumption Agreement (VIOC Centers) dated as of March 18,
2004, between Ashland Inc. and ATB Holdings Inc.
10.3 Assignment and Assumption Agreement (Maleic Business) dated as of March
18, 2004, between Ashland Inc. and ATB Holdings Inc.
10.4 Amendment No. 2 dated as of March 18, 2004 to the Amended and Restated
Limited Liability Company Agreement dated as of December 31, 1998 of
Marathon Ashland Petroleum LLC, by and between Ashland Inc. and Marathon
Oil Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASHLAND INC.
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(Registrant)
Date: March 22, 2004
/s/ J. Marvin Quin
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Name: J. Marvin Quin
Title: Senior Vice President
and Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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2.1 Master Agreement dated as of March 18, 2004, among Ashland Inc., ATB
Holdings Inc., EXM LLC, New EXM Inc., Marathon Oil Corporation, Marathon
Oil Company, Marathon Domestic LLC and Marathon Ashland Petroleum LLC
(the "Master Agreement").
10.1 Tax Matters Agreement dated as of March 18, 2004, among Ashland Inc., ATB
Holdings Inc., EXM LLC, New EXM Inc., Marathon Oil Corporation, Marathon
Oil Company, Marathon Domestic LLC and Marathon Ashland Petroleum LLC.
10.2 Assignment and Assumption Agreement (VIOC Centers) dated as of March 18,
2004, between Ashland Inc. and ATB Holdings Inc.
10.3 Assignment and Assumption Agreement (Maleic Business) dated as of March
18, 2004, between Ashland Inc. and ATB Holdings Inc.
10.4 Amendment No. 2 dated as of March 18, 2004 to the Amended and Restated
Limited Liability Company Agreement dated as of December 31, 1998 of
Marathon Ashland Petroleum LLC, by and between Ashland Inc. and Marathon
Oil Company.