The USX Corp. board of directors has approved a reorganization plan calling for a tax-free spin-off of the steel-related assets into a separate publicly traded company, United States Steel Corp., while the energy business operates as Marathon Oil Corp. Plans for the split came nearly 20 years after USX acquired the Houston-based oil and gas E&P company in 1982.

Thomas J. Usher, USX chairman, announced the decision to split Tuesday, saying it was based in part on the advice of Credit Suisse First Boston and Salomon Smith Barney. Usher emphasized that the planned reorganization is subject to approval of USX shareholders, receipt of a favorable tax ruling from the Internal Revenue Service (IRS) on the tax-free nature of the transaction, completion of necessary financing arrangements and receipt of necessary regulatory and third-party consents. The transaction is expected to occur at year-end, subject to the absence of any materially adverse change in business conditions for the energy and/or steel business, delay in obtaining the IRS ruling or other unfavorable circumstances.

Usher also announced that the USX board has identified the directors for Marathon and United States Steel, who will begin board service following completion of the planned reorganization. The current USX board will continue to oversee the affairs of the corporation until the reorganization is completed.

Current USX directors who will serve on the new board of Marathon include Usher (chairman), Clarence P. Cazalot, Jr. (president and CEO), Dr. Shirley Ann Jackson, Charles R. Lee, Douglas C. Yearly, Seth E. Schofield, Charles A. Corry and Neil A. Armstrong. Joining the Marathon board will be David A. Daberko, chairman of National City Corp., and Dennis H. Reilley, chairman of Praxair, Inc.

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