LYONDELL AND MILLENNIUM ANNOUNCE AGREEMENT TO COMBINE
Lyondell Chemical Co. and Millennium Chemicals Inc. have announced the approval and execution of a definitive agreement for the 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.