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USX to Split Into Energy, Steel Businesses

April 25, 2001|Reuters

USX Corp. said its board agreed to divide its two units, USX-U.S. Steel and USX-Marathon Group, into separate energy and steel businesses in a reorganization of the corporation's much-criticized tracking-stock structure. The plan calls for a tax-free spinoff of USX Corp.'s steel business into United States Steel Corp., which will be an independent and publicly traded concern. Current USX-U.S. Steel common stockholders would become shareholders of U.S. Steel Corp., it said, while shareholders of USX-Marathon Group would become holders of Marathon Oil common stock. The spinoff is expected to occur by the end of the year. Lifted by strong prices for oil and natural gas, USX-Marathon said last week that first-quarter earnings climbed to a record $478 million. USX-U.S. Steel, meanwhile, reported a first-quarter loss amid softening demand in the slowing economy and weaker steel prices. But under the plan to formally split the two units, the steel unit's debt will be transferred to Marathon, leaving the steel company stronger financially, analysts said. That prospect drove USX-U.S. Steel shares up $3.01 to $18.90 on the New York Stock Exchange, while USX-Marathon shares rose 57 cents to $31.94.

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