SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
Lyondell Chemical Company
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
not applicable
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(CUSIP Number)
Donald P. de Brier, Esq.
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
(310) 208-8800
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 22, 2002
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(e), 13d-1(f) or 13d-1(g), check the following box
[ ]
Page 1 of 13 Pages
CUSIP No. not applicable
--------------
(1) Names of reporting persons. Occidental Petroleum Corporation
I.R.S. Identification Nos. of above persons (entities 95-4035997
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. Delaware
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 39,000,000 (including 34,000,000
shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 39,000,000 (including 34,000,000
shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 39,000,000 (including 34,000,000
reporting person shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 23.7%
(11).
(14) Type of reporting person (see instructions). CO
Page 2 of 13 Pages
CUSIP No. not applicable
--------------
(1) Names of reporting persons. Occidental Petroleum Investment Co.
I.R.S. Identification Nos. of above persons (entities 95-2584267
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. California
Number of shares beneficially owned by each reporting
person with:
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 39,000,000 (including 34,000,000
shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 39,000,000 (including 34,000,000
shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 39,000,000 (including 34,000,000
reporting person shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 23.7%
(11).
(14) Type of reporting person (see instructions). CO
Page 3 of 13 Pages
CUSIP No. not applicable
--------------
(1) Names of reporting persons. Occidental Chemical Holding Corporation
I.R.S. Identification Nos. of above persons (entities 95-2865897
only).
(2) Check the appropriate box if a member of a group (a)
(see instructions) (b)
(3) SEC use only.
(4) Source of funds (see instructions). OO
(5) Check if disclosure of legal proceedings is required
pursuant to Items 2(d) or 2(e).
(6) Citizenship or place of organization. California
Number of shares beneficially owned by each reporting
person with:
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power. 0
(8) Shared voting power. 39,000,000 (including 34,000,000
shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(9) Sole dispositive power. 0
(10) Shared dispositive power. 39,000,000 (including 34,000,000
shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(11) Aggregate amount beneficially owned by each 39,000,000 (including 34,000,000
reporting person shares of Series B Common Stock
and 5,000,000 shares of Lyondell
regular common stock issuable
upon exercise of a warrant)
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
(13) Percent of class represented by amount in Row 23.7%
(11).
(14) Type of reporting person (see instructions). CO
Page 4 of 13 Pages
ITEM 1. SECURITY AND ISSUER.
Title of class of equity security: Series B Common Stock
Common Stock
Issuer: Lyondell Chemical Company
Address of principal executive offices: 1221 McKinney Street, Suite 700
Houston, Texas 77010
This Schedule relates to the Series B Common Stock of Lyondell and a
warrant to acquire shares of the regular common stock of Lyondell. For reporting
purposes, the Reporting Person has treated the Series B Common Stock of Lyondell
as being part of the same class under Section 12 of the 1934 Act as the regular
common stock of Lyondell.
ITEM 2. IDENTITY AND BACKGROUND.
Occidental Petroleum Corporation ("Occidental"):
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state of organization: Delaware
principal business: engaged, through its subsidiaries and
affiliates, in the production,
development and marketing of natural
resources and chemicals
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Occidental Petroleum Investment Co. ("OPIC"):
---------------------------------------------
state of organization: California
principal business: holding company
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Occidental Chemical Holding Corporation ("OCHC"):
-------------------------------------------------
state of organization: California
principal business: holding company
principal business address: 10889 Wilshire Boulevard
Los Angeles, California 90024
Page 5 of 13 Pages
The name, business address and current principal occupation or
employment of each of the executive officers and directors of Occidental, OPIC
and OCHC (collectively, the "Companies") are set forth below. Unless otherwise
indicated, the business address of each such person is 10889 Wilshire Boulevard,
Los Angeles, California 90024. All such persons listed below are citizens of the
United States except Mr. Syriani, who is a citizen of Lebanon; Dr. Segovia, who
is a citizen of Colombia; and Mr. Feick, who is a citizen of Canada. Unless
otherwise indicated, each occupation set forth opposite an individual's name
refers to employment with Occidental. Directors of Occidental are identified by
an asterisk (*).
Name and Business Address Present Principal Occupation or Employment
------------------------- ------------------------------------------
Ray R. Irani* Chairman of the Board and Chief Executive
Officer of Occidental
John W. Alden (1) Assistant Treasurer and Assistant
Secretary of Occidental; Vice President
and Secretary of OPIC
Ronald W. Burkle* Managing Partner and majority owner of The
9130 West Sunset Boulevard Yucaipa Companies
Los Angeles, California 90069
John S. Chalsty* Senior Advisor, Credit Suisse First Boston
11 Madison Avenue
New York, New York 10010
Stephen I. Chazen Chief Financial Officer and Executive Vice
President - Corporate Development of
Occidental
Donald P. de Brier Executive Vice President, Secretary and
General Counsel of Occidental
Edward P. Djerejian* Director, James A. Baker III Institute for
Rice University, MS-40 Public Policy
6100 Main Street
Houston, Texas 77005-1892
S. P. Dominick, Jr. (2) Vice President and Controller of
Occidental; Vice President and Controller
of OPIC
John E. Feick* President and Chief Executive Officer of
230, 319-2nd Avenue, SW Matrix Solutions, Inc.
Calgary, Alberta, Canada T2P OC5
Richard W. Hallock Executive Vice President - Human Resources
of Occidental
Page 6 of 13 Pages
Name and Business Address Present Principal Occupation or Employment
------------------------- ------------------------------------------
J. R. Havert (2) Vice President and Treasurer of
Occidental; Vice President and Treasurer
of OPIC; Vice President and Treasurer of
OCHC
R. P. Heinkel Vice President of OCHC
5005 LBJ Freeway
Dallas, Texas 75244
J. Roger Hirl Executive Vice President of Occidental
5005 LBJ Freeway
Dallas, Texas 75244
Kenneth J. Huffman Vice President - Investor Relations of
Occidental
Scott A. King (2) Vice President and General Counsel of OCHC
5005 LBJ Freeway
Dallas, Texas 75244
Dale R. Laurance* President of Occidental
Anthony R. Leach Vice President - Finance of Occidental;
President of OPIC; Executive Vice
President of OCHC
Jim A. Leonard (1) Senior Assistant Controller of Occidental
Richard A. Lorraine Executive Vice President and Chief
5005 LBJ Freeway Financial Officer of OCHC
Dallas, Texas 75244
Irvin W. Maloney* Retired Chairman and Chief Executive
Officer, Dataproducts Corporation
Robert M. McGee Vice President of Occidental
Lawrence P. Meriage Vice President - Communications and Public
Affairs of Occidental
Donald L. Moore Vice President and Chief Information
5 East Greenway Plaza Officer of Occidental
Houston, Texas 77046-0504
John W. Morgan Executive Vice President - Operations of
Occidental; Vice President of OPIC
Page 7 of 13 Pages
Name and Business Address Present Principal Occupation or Employment
------------------------- ------------------------------------------
R. Casey Olson Vice President of Occidental
5 East Greenway Plaza
Houston, Texas 77046-0504
Linda S. Peterson (1) Assistant Secretary of Occidental;
Assistant Secretary of OPIC; Vice
President and Assistant Secretary of OCHC
Rodolfo Segovia* Member of Executive Committee of
Carrera 9A No. 99-02 OF. 1001 Inversiones Sanford
Santafe de Bogota, D.C. Colombia
Richard A. Swan Vice President - Health, Environment and
Safety of Occidental
Aziz D. Syriani* President and Chief Operating Officer of
505 Park Avenue - 11th Floor The Olayan Group
New York, New York 10022
Rosemary Tomich* Owner of the Hope Cattle Company and the
A.S. Tomich Construction Company; Chairman
of the Board of Directors and Chief
Executive Officer, Livestock Clearing,
Inc.
Aurmond A. Watkins, Jr. Vice President - Tax of Occidental; Vice
President of OCHC
Walter L. Weisman* Past Chairman and Chief Executive Officer
P.O. Box 18017 of American Medical International, Inc.
Beverly Hills, California 90209
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(1) Director of OPIC
(2) Director of OCHC
During the last five years, none of the Companies or the natural persons
named above (a) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) was a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Page 8 of 13 Pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Occidental paid Lyondell $440 million pursuant to a Securities Purchase
Agreement, dated as of July 8, 2002, between Lyondell and OCHC (the "Securities
Purchase Agreement").1
ITEM 4. PURPOSE OF TRANSACTION.
Directly and through OPIC and OCHC, Occidental currently holds its
Lyondell shares for investment purposes only with a view toward maximizing
long-term shareholder value for Occidental's shareholders and not for the
purpose of controlling Lyondell.
Other than as set forth above or in Item 6 of this Schedule 13D,
Occidental currently has no plans that relate to, or would result in, any of the
actions listed in clauses (a) through (j) of Item 4 of Schedule 13D. However,
Occidental continuously reviews and analyzes its investments in each of its
subsidiaries and other operations, including the Lyondell shares, in order to
determine whether value for Occidental's shareholders is best served by holding
those investments, increasing, disposing of, or monetizing those investments, or
recapitalizing or otherwise restructuring those investments. With respect to the
Lyondell shares, these reviews and analyses depend on a variety of factors,
including without limitation, the price of, and other market conditions relating
to, the Lyondell shares, the investment return on the Lyondell shares,
Lyondell's business and prospects, other investment and business opportunities
available to Occidental, general stock market and economic conditions, tax
considerations, and other factors deemed relevant.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Occidental: aggregate number of shares held: 39,000,000*
----------- percentage of class: 23.7%
OPIC: aggregate number of shares held: 39,000,000*
----- percentage of class: 23.7%
OCHC: aggregate number of shares held: 39,000,000*
----- percentage of class: 23.7%
None of the directors or executive officers listed in Item 2 above is
the beneficial owner of Lyondell common stock.
---------------------
1 The $440 million came from general corporate funds received when
Occidental sold to Lyondell three of its affiliates, which own a 29.5% interest
in Equistar Chemicals, LP.
* This number includes 34,000,000 shares of Series B Common Stock and
5,000,000 shares of regular common stock issuable upon exercise of the Warrant
for the Purchase of Shares of Common Stock, issued August 22, 2002 (the
"Warrant").
Page 9 of 13 Pages
(b) Occidental: sole power to vote or direct the vote: 0
----------- shared power to vote or direct the vote: 39,000,000*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 39,000,000*
OPIC: sole power to vote or direct the vote: 0
----- shared power to vote or direct the vote: 39,000,000*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 39,000,000*
OCHC: sole power to vote or direct the vote: 0
----- shared power to vote or direct the vote: 39,000,000*
sole power to dispose or direct the disposition: 0
shared power to dispose or direct the disposition: 39,000,000*
None of the directors or executive officers listed in Item 2 above is
the beneficial owner of Lyondell common stock.
(c) On August 22, 2002, pursuant to the Securities Purchase Agreement,
Occidental acquired 34,000,000 shares of Series B Common Stock of Lyondell for
$440,000,000.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to the Securities Purchase Agreement, OCHC purchased from
Lyondell a total of 34,000,000 shares of Lyondell's newly created Series B
common stock. Pursuant to a Warrant, issued August 22, 2002 (the "Warrant"),
OCHC also received warrants to purchase an additional 5 million shares (the
"Warrant Shares") of Lyondell's regular common stock for $25 per share. In
exchange for the Lyondell securities, Occidental paid $440,000,000 in cash.
As additional consideration for the transaction, Occidental will receive
from Lyondell a contingent payment equal to 7.38% of cash distributions from
Equistar for 2002 and 2003 up to a total of $35 million, to be paid either in
cash or in Lyondell common stock.
Pursuant to a Stockholders Agreement, dated as of August 22, 2002 (the
"Stockholders Agreement"), Lyondell has appointed to its board of directors two
of Occidental's executive officers, Dr. Ray R. Irani (who also is an Occidental
director) and Mr. Stephen I. Chazen. Unless Occidental obtains Lyondell's
consent, the Stockholders Agreement prevents Occidental (a) from selling its
Series B common stock or the Warrant Shares and (b) from converting its
---------------------
* This number includes 34,000,000 shares of Series B Common Stock and
5,000,000 shares of regular common stock issuable upon exercise of the Warrant.
Page 10 of 13 Pages
Series B common stock into regular Lyondell common stock for at least two years.
In addition, the Stockholders Agreement generally requires Occidental to vote
its Lyondell common stock in favor of the slate of directors proposed by
Lyondell's management. The Stockholders Agreement will be effective as long as
Occidental owns 17 million or more shares of Lyondell common stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Agreement Pursuant to Rule 13d-1(k)
Exhibit 2 Securities Purchase Agreement, dated as of July 8, 2002,
by and between Lyondell Chemical Company and Occidental
Chemical Holding Corporation
Exhibit 3 Warrant for the Purchase of Shares of Common Stock,
issued August 22, 2002
Exhibit 4 Stockholders Agreement, dated as of August 22, 2002, by
and among Lyondell Chemical Company and the Stockholders
as defined therein
Page 11 of 13 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
September 3, 2002 OCCIDENTAL PETROLEUM CORPORATION
By: /s/ J. R. HAVERT
--------------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
OCCIDENTAL PETROLEUM INVESTMENT CO.
By: /s/ J. R. HAVERT
--------------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
OCCIDENTAL CHEMICAL HOLDING CORPORATION
By: /s/ J. R. HAVERT
--------------------------------------------
Name: J. R. Havert
Title: Vice President and Treasurer
Page 12 of 13 Pages