Filed by Ultramar Diamond Shamrock Corporation
                           Pursuant to Rule 425 under the Securities Act of 1933
                                        and deemed filed pursuant to Rule 14a-12
                                       under the Securities Exchange Act of 1934

                         Subject Company:  Ultramar Diamond Shamrock Corporation
                                                     Commission File No. 1-11154


                                      1 + 1
                     (VLO logo)                    (UDS logo)

                                       = 3
                            A Bigger, Better Employer
                               An Industry Leader
                         A Stronger Community Supporter

         The eyes of the energy  industry  will soon be on San Antonio as Valero
Energy  Corporation and Ultramar  Diamond Shamrock  Corporation  prepare to join
forces to create  the  premier  refining  and  marketing  company  in the United
States.  The new San  Antonio-based  company  will  have  23,000  employees,  13
refineries  and a total  refining  capacity of just under 2 million  barrels per
day, making it second only to ExxonMobil in terms of total refining capacity. It
will also be one of the nation's  largest  retailers with more than 5,000 retail
outlets in the United States and Canada.

         And as the  company  grows  and  prospers,  so  will  the  San  Antonio
community.  This  partnership  creates  a  great  company  of  similar  cultures
dedicated to charitable giving and community service. Because the companies will
earn more on a combined basis than independently,  charitable contributions will
increase. And just as importantly,  since the combined entity will be poised for
greater  growth  and  success,   that  should   translate  into  many  more  job
opportunities in San Antonio.

         So while  there are many  changes  ahead for Valero and UDS,  one thing
will never change,  and that's our commitment to  contributing  to San Antonio's
growth and success.

         You are urged to read the joint proxy statement/prospectus that will be
sent to Valero and UDS  stockholders  regarding  the  proposed  merger,  when it
becomes  available,  because it will contain  important  information.  The joint
proxy  statement/prospectus may be obtained free of charge on the SEC's web site
at  www.sec.gov  or upon request  from Valero or UDS.  Valero and UDS, and their
respective  directors,  executive  officers  and  employees,  may be  soliciting
proxies from their respective  stockholders in favor of the merger.  Information
regarding these persons may be obtained in the joint proxy  statement/prospectus
referred to above when it is filed with the SEC.