USX Plans Reorganization Of Steel, Energy Units

By BridgeNews and staff Pittsburgh's USX Corp. plans to separate USX-Marathon Group and USX-U.S. Steel Group. USX plans to spin off its steel unit into a publicly traded firm, U.S. Steel Corp. The separation is expected to enable the units to focus on core operations and provide them with flexibility for expansion. USX named its chairman and chief executive, Thomas J. Usher, chairman and chief executive of U.S. Steel and chairman of Marathon Oil. The company also named Clarence P. Cazalot Jr. Marathon Oil's president and CEO. "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," says Usher. The plan, which is expected to be implemented at year's end, envisions a tax-free spin-off of the steel and steel-related businesses of USX Corp. into a freestanding, publicly traded company. Usher reported that separating Marathon and U.S. Steel will give each company more flexibility in expanding its business through stock-based acquisitions, which he believes will be beneficial in view of the global consolidation taking place in both the energy and steel industries. 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. Usher said that employees of both U.S. Steel and Marathon and the communities in which they are located should not be negatively impacted by the reorganization plan. Marathon will continue to be headquartered in Houston; Marathon Ashland Petroleum in Findlay, Ohio, and U.S. Steel in Pittsburgh.

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