Lyondell and Millennium Announce Agreement to Combine

30-Mar-2004

Lyondell Chemical Company and Millennium Chemicals Inc. announced that their Boards of Directors have approved, and the companies have executed, a definitive agreement for a stock-for-stock business combination of the companies, expected to be tax-free to the shareholders of Millennium and the companies. The transaction will create North America's third-largest independent, publicly traded chemical producer with combined pro forma 2003 revenues of more than $11 billion and market capitalization of nearly $4 billion.

Millennium shareholders will receive between 0.95 and 1.05 shares of Lyondell common stock for each share of Millennium common stock, depending on the volume-weighted average price for the Lyondell shares for the 20 trading days ending on the third trading day before closing. Millennium shareholders will receive 0.95 shares of Lyondell stock if the average Lyondell stock price is $20.50 or greater, and 1.05 if it is $16.50 or less. Between the two prices, the exchange ratio varies proportionately.

The new shares will be entitled to receive the same cash dividend as existing outstanding Lyondell shares. Based on recent trading, the transaction is valued at approximately $2.3 billion including approximately $1.3 billion of Millennium net debt.

The transaction is subject to customary conditions including approval by both companies' shareholders, and is expected to close in the third quarter of 2004.

After the close of the transaction, the company will be called "Lyondell Chemical Company" and will be headquartered in Houston, Texas. Dan F. Smith will continue as president and chief executive officer, and Dr. William T. Butler will continue as the independent chairman of the Lyondell Board of Directors. Two independent members of Millennium's current Board will join the Lyondell Board, effective at the time of the closing.

The transaction combines two U.S. chemical companies that are well positioned globally, with leading positions in propylene oxide and derivatives, titanium dioxide (TiO2) and acetyls. And, through their Equistar joint venture -- a major North American producer of ethylene, propylene, polyethylene and aromatics -- they have significant leverage to the petrochemical cycle, providing opportunity for the combined company's shareholders to take full advantage of the recovery in the petrochemical cycle. The combined company will operate in 16 countries and employ about 10,000 people worldwide.

https://www.chemeurope.com/en/news/36409/lyondell-and-millennium-announce-agreement-to-combine.html