Ashland spin off Valvoline; forms two independent businesses

Ashland to spin off Valvoline; forms two independent businesses

5:59 AM, 23rd September 2015
Ashland to spin off Valvoline; forms two independent businesses

COVINGTON, US: Ashland Inc said that it will separate Ashland into two independent, publicly traded companies - Ashland specialty chemicals company and Valvoline businesses. The separation is expected to be completed soon, but not less than a year from now.

The new specialty chemicals company will focus on fast-growing consumer and industrial markets, while Valvoline will be an engine and automotive maintenance business, having premium-branded lubricants, the company said.

The company intends for the separation to be tax free for Ashland shareholders. Following the separation, Ashland shareholders will own shares of both the new Ashland and Valvoline.

The separation represents the final step in Ashland’s transformation from an oil refiner and marketer to a specialty chemicals company. “We believe that separating into two industry-leading public companies - one focused on specialty chemicals and the other focused on high-performance lubricants - will generate significant value for shareholders by enabling each company to focus on its specific business and strategic priorities,” said William Wulfsohn, chairman and chief executive officer, Ashland.

The new Ashland specialty chemical company is currently served by Ashland’s chemicals group - specialty ingredients and performance materials. Key markets and applications include pharmaceutical, personal care, food and beverage, architectural coatings, adhesives, automotive, construction and energy. The businesses generated approximately $3.6 billion sales for the 12 months ended 30 June.

Valvoline will focus on building its do-it-yourself (DIY); installers; Valvoline instant oil change; and international business. The brand generated sales of $2 billion in the 12-month period ended 30 June. As an independent publicly traded company, Valvoline will focus on growing its network of 940 Valvoline instant oil change service centres, leveraging the Valvoline brand across multiple channels to capture new market share and expanding its presence in Asia, Europe, Latin America and other international markets.

Wulfsohn will serve as chairman and CEO of the new Ashland and as non-executive chairman of Valvoline, following the separation. Luis Fernandez-Moreno, currently senior vice president of Ashland and president of Ashland’s chemicals group, will be chief operating officer of the new company. Sam Mitchell, currently senior vice president of Ashland and president of Valvoline, will serve as CEO.

BofA Merrill Lynch is acting as financial advisor and Cravath, Swaine & Moore LLP is acting as legal advisor.

© Worldofchemicals News

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