May 1, 2004
Marathon picks up share in refinery
Marathon Oil Corp. will pay $1.1 billion to purchase its partner's, Ashland Inc.'s, minority stake in the nation's fifth-largest gasoline refining and marketing business.
As part of the deal giving it full ownership of Marathon Ashland Petroleum LLC, or MAP, Marathon will also acquire Ashland's maleic anhydride business and 61 Valvoline Instant Oil Change centers in Michigan and northwest Ohio as part of the transaction.
Covington, Ky.–based Ashland said its shareholders will receive Marathon stock valued at $315 million for the sale of the company's share of MAP. The deal also includes $794 million in cash and accounts receivable to go to Ashland by MAP. Marathon will assume $1.9 billion in debt.
Ashland owns 38% of Marathon Ashland Petroleum. Houston-based Marathon owns the rest.
The refining and marketing business has been a drag on earnings at Ashland. Ashland said it would use cash generated from the deal to retire all or most of its debt and other financial obligations.
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