Filed by Ashland Inc. pursuant to Rules 165 and 425 promulgated
under the Securities Act of 1933, as amended, and deemed
filed pursuant to Rule 14a-12 promulgated under the
Securities Exchange Act of 1934, as amended.
Subject Company: Ashland Inc.
Commission File No.: 001-02918
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 agreements listed below relating to the proposed transaction
were filed by Ashland under cover of a Current Report on Form 8-K (the "Form
8-K") today and are incorporated by reference into this filing. The foregoing
description of the transaction is qualified in its entirety by reference to
the terms of those agreements.
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") (incorporated by reference to
Exhibit 2.1 of the Form 8-K).
2. 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 (incorporated by reference to Exhibit
10.1 of the Form 8-K).
3. Assignment and Assumption Agreement (VIOC Centers) dated as of March
18, 2004, between Ashland Inc. and ATB Holdings Inc (incorporated by
reference to Exhibit 10.2 of the Form 8-K).
4. Assignment and Assumption Agreement (Maleic Business) dated as of
March 18, 2004, between Ashland Inc. and ATB Holdings Inc
(incorporated by reference to Exhibit 10.3 of the Form 8-K).
5. 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 (incorporated by reference to Exhibit
10.4 of the Form 8-K).
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
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.