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Chemical Giant Ashland Splits into Two

Friday, October 2, 2015

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Chemical giant Ashland Inc. is splitting into two companies so that each can focus on a different area within its market strengths.

The new Ashland Inc. will focus on specialty chemicals, while the new Valvoline Inc. will focus on high-performance lubricants, the company announced Sept. 22. Ashland’s board of directors recently approved the split of the Covington, KY-based company.

Final Step in Transformation

The announcement follows a comprehensive strategic planning process initiated by the company’s global leadership team to better understand the company’s markets, customers and the opportunities for each business, Ashland said.

Ashland
Ashland Inc.

William A. Wulfsohn (left), Ashland chairman and CEO, will continue to serve as such for the new Ashland. Following the separation, he plans to serve as non-executive chairman of Valvoline. Sam Mitchell (right), currently senior vice president of Ashland and president of Valvoline, will serve as CEO of Valvoline.

The split also represents the final step in Ashland’s more than decade-long transformation from an oil refiner and marketer to a special chemicals company, during which the company completed dozens of acquisitions and divestitures, the company noted.

Two 'Strong' Platforms

“Ashland is fortunate to have two strong, but distinctly different, business platforms with attractive growth opportunities and experienced leadership teams,” said William A. Wulfsohn, Ashland chairman and CEO.

“We believe that separating into two industry-leading public companies […] will generate significant value for shareholders by enabling each company to focus on its specific business and strategic priorities."

A New Ashland

The new Ashland will provide specialty chemical solutions to customers in a wide range of consumer and industrial markets.

These markets are currently served by Ashland's Chemicals Group, comprising Ashland Specialty Ingredients and Ashland Performance Materials.

Key markets and applications include pharmaceutical; personal care; food and beverage; architectural coatings; adhesives; automotive; construction; and energy. Together these businesses generated approximately $3.6 billion in sales for the 12 months ended June 30.

©iStock.com / jgroup

Key markets and applications for Ashland Inc. include architectural coatings, adhesives, construction and energy.

Wulfsohn will serve as chairman and CEO of the new Ashland following the separation, while Luis Fernandez-Moreno, currently senior vice president of Ashland and president of Ashland's Chemicals Group, will be COO of Valvoline.

Kevin Willis, currently senior vice president and CFO of Ashland, will serve in the same capacity in the new Ashland.  

Valvoline

Valvoline Inc., currently a division of Ashland, will become its own entity under the split. It will be focused on the engine and automotive maintenance industry by providing hands-on expertise to customers in each of its primary market channels.

The global brand, which soon will celebrate its 150th anniversary, generated sales of $2 billion in the 12-month period ended June 30.

Wulfsohn will serve as non-executive chairman of Valvoline following the separation, and Sam Mitchell, currently senior vice president of Ashland and president of Valvoline, will serve as CEO. 

Transaction Details

Ashland plans to begin the process to separate its specialty chemicals and Valvoline businesses while it finalizes the transaction structure and obtains customary regulatory and other approvals, the company announced.

The company intends for the separation, which is subject to final board approval prior to completion, to be tax free for Ashland shareholders.

Immediately following the separation, Ashland shareholders will own shares of both the new Ashland and Valvoline, the company added.

   

Tagged categories: Architectural coatings; Business matters; Business operations; Coating chemistry; Coatings manufacturers; Coatings raw materials manufacturers; Construction chemicals; Oil and Gas; Raw materials

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