SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 20, 2004
ASHLAND INC.
(Exact name of registrant as specified in its charter)
Kentucky
(State or other jurisdiction of incorporation)
1-2918 61-0122250
(Commission File Number) (I.R.S. Employer
Identification No.)
50 E. RiverCenter Boulevard, Covington, Kentucky 41012-0391
(Address of principal executive offices) (Zip Code)
P.O. Box 391, Covington, Kentucky 41012-0391
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code (859) 815-3333
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[X ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 2230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01. Other Events
On December 20, 2004, Ashland issued a press release announcing that
the Internal Revenue Service (IRS) has now indicated that it does not
intend to provide all the rulings requested by Ashland Inc. and Marathon
Oil Corporation in the proposed transaction to transfer Ashland's
38-percent interest in Marathon Ashland Petroleum LLC (MAP) to Marathon.
As previously announced in March 2004, Ashland entered into an
agreement with Marathon through which Ashland would transfer its 38-percent
interest in MAP to Marathon. The transaction is subject to several
previously disclosed conditions, including receipt of a favorable private
letter ruling from the IRS with respect to the tax treatment of the
transaction. Earlier this year, Ashland submitted a request to the IRS for
a private letter ruling on the tax treatment of the transaction.
Ashland reported in its Form 10-K filing on December 14, 2004, that it
had engaged in discussions with the IRS with respect to the complex tax
issues related to this transaction and had not resolved all issues. At that
time, Ashland reported that it could not predict whether the requested
rulings would be received.
The IRS has now indicated that it does not intend to provide all the
rulings requested by Ashland and Marathon. As previously disclosed, Ashland
might have incurred Section 355(e) gain on the transaction equal to the
difference between the fair market value of Ashland and the tax basis of
Ashland. One of the IRS rulings requested was that the tax basis in Ashland
not be reduced by the assumption of contingent liabilities associated with
discontinued business operations in a way that would cause additional
Section 355(e) gain to be recognized. The IRS has informed Ashland and
Marathon that it intends to rule adversely on this specific tax basis
issue. Under the IRS' indicated position on this issue, the basis of the
Ashland shares would be reduced by the amount of such contingent
liabilities in a manner that would likely create significant additional
Section 355(e) gain. Ashland believes that the IRS would grant all other
requested rulings that are conditions to closing the transaction.
Ashland and Marathon disagree with the IRS' position on the contingent
liabilities issue and will attempt to further discuss this issue with the
IRS. However, Ashland believes that it is unlikely that the previously
announced
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transaction will close. Ashland remains pleased with its
ownership interest in MAP and, therefore, does not have any plans to
exercise its option to put its interest in MAP to Marathon. Nonetheless, if
the previously announced transaction does not close, Ashland would consider
other alternatives for the transfer of its interest to Marathon. There is a
substantial risk that no acceptable alternative transaction will be
identified.
A copy of the December 20, 2004 press release is attached hereto as
Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated December 20, 2004
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ASHLAND INC.
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(Registrant)
Date: December 20, 2004 /s/ J. Marvin Quin
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Name: J. Marvin Quin
Title: Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
99.1 Press Release dated December 20, 2004
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