MAP May Break Up After All


Ashland Inc. and Marathon Oil Corp. have not given up on their plan for the former to divest its stake in their Marathon Ashland Petroleum joint venture. Ashland said last week that the companies have proposed possible modifications in hopes of finding a way for the deal to receive favorable tax treatment from the U.S. Internal Revenue Service.

Just two months ago the companies said they had failed to receive a commitment for favorable treatment to the original proposal, which was announced in March 2004, and so the deal probably would not be completed. Ashlands Feb. 8 announcement seemed a bit more optimistic.

Get alerts when new Sustainability Blog articles are available.


Ashland and Marathon have continued their discussions with the IRS and are discussing with the IRS modifications of the proposed transaction that would allow a tax efficient transfer of Ashland’s interest in MAP to Marathon, the company said in a news release. While cautioning that an agreement still may not be reached, the statement added, If an agreement is reached on a modified transaction, it is likely that the transaction would close in the second calendar quarter of 2005.

Ashland owns a 38 percent stake in MAP, which owns seven U.S. refineries. One, located in Cattlettsburg, Ky., includes a base oil plant with capacity to produce 6,700 barrels per day of Group I stocks.

The proposed transaction calls for Marathon to pay $3 billion in cash and assumed debt to acquire Ashlands stake, along with Ashlands maleic anhydride business and 61 Valvoline Instant Oil Change quick lubes.

Related Topics

Market Topics