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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.
mmission File No.: 001-02918
(Message to employees from Ashland's Chief Executive Officer posted on
Ashland's intranet site on April 28, 2005 regarding the MAP transaction)
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MESSAGE FROM OUR CEO
Note: This letter will be reprinted in the Ashland Source in May.
April 28, 2005
Dear Ashland Employees,
By now you have likely heard Ashland has announced an amended agreement to
transfer our 38-percent interest in Marathon Ashland Petroleum LLC (MAP),
our maleic anhydride business and 60 Valvoline Instant Oil Change (VIOC)
centers in Michigan and northwest Ohio to Marathon. Under the amended
agreement, Ashland's interest in these businesses is valued at
approximately $3.7 billion compared to approximately $3 billion in the
earlier agreement, with substantially all the increase in value going
directly to our shareholders in the form of Marathon stock. In addition,
Marathon has agreed to pay certain taxes that may be payable in connection
with this transaction. The transaction is expected to be tax free to
Ashland's shareholders and tax efficient to Ashland.
Ashland's Board of Directors took a comprehensive look at the alternatives
available with respect to our ownership interest in MAP and concluded that
the transaction's tax efficient structure was the best alternative. Of the
increased value of $700 million, $600 million is in Marathon stock, which
is being delivered directly to our shareholders, and there is a significant
reduction of our tax risk. Also, this tax-efficient transaction provides
certainty with respect to both timing and the value of our interest in MAP.
We have agreed with Marathon to use our reasonable best efforts to complete
the transaction by June 30, 2005. After the close of this transaction, we
will own four divisions in two Sectors -- Chemical and Transportation
Construction -- both of which are focused on meeting customers' needs,
enabling growth through process improvement, and achieving top-quartile
performance.
After the closing, Ashland employees currently working within our maleic
anhydride business and the 60 VIOC centers will work for Marathon. We have
already started to build plans for a smooth transition. We appreciate very
much the hard work and contributions of these employees and friends and
wish them the best in their new roles. While our co-workers will be missed,
they will be going from one great company to another great company.
Marathon is a company with whom we have shared much history and success. In
fact, we expect this transaction to expand our business relationships with
MAP and Marathon. MAP is currently a supplier to our Valvoline, APAC and
chemical distribution businesses, selling us lube stocks, asphalt and
solvents. MAP is also a customer for packaged products from Valvoline and
water treatment chemicals provided by our Specialty Chemical division. MAP
will become the sole supplier of maleic anhydride for our domestic
unsaturated polyester resin business and will become our largest VIOC
franchisee.
This deal marks a new era for Ashland and, when it is completed, it will
bring to a close our 80-year history in refining and marketing. I am really
excited about our future and I am confident we are well-positioned to
create long-term value for our customers, our shareholders and our
employees.
Jim
FORWARD-LOOKING STATEMENTS
This document 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, earnings and expectations about the MAP
transaction. 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 MAP transaction; the
possibility the transaction may not close including as a result of failure
to receive a favorable ruling from the Internal Revenue Service or failure
of Ashland to obtain the approval of its shareholders; the possibility 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 (SEC) 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, 2004, filed with the SEC
and available on 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 document to reflect events or
circumstances after the date of this document.
ADDITIONAL INFORMATION ABOUT THE MAP TRANSACTION
In connection with the proposed transaction, Ashland filed a preliminary
proxy statement on Schedule 14A with the SEC on June 21, 2004 and an
amended preliminary proxy statement on Schedule 14A on August 31, 2004. ATB
Holdings Inc. and New EXM Inc. filed a registration statement on Form S-4,
which includes a further amended preliminary proxy statement/prospectus,
with the SEC on October 12, 2004. Investors and security holders are urged
to read those documents and any other relevant documents filed or that will
be filed with the SEC, including the definitive proxy statement/prospectus
regarding the proposed transaction as they become available, because they
contain, or will contain, important information. The definitive proxy
statement/prospectus will be filed with the SEC by Ashland, and security
holders may obtain a free copy of the definitive proxy statement/prospectus
when it becomes available, and other documents filed with the SEC by
Ashland, including the preliminary proxy statement at the SEC's website at
www.sec.gov. The definitive proxy statement/prospectus, and other documents
filed with the SEC by Ashland, including the preliminary proxy statement,
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 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 14, 2004. 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
definitive proxy statement/prospectus when it becomes available.