Ashland to separate into two independent public companies

Will split speciality chemicals from its engine and automotive maintenance business

US ingredients firm Ashland plans to split into two, independent, public companies, in a move that separates its engine and automotive maintenance business from its speciality chemicals business.

The former will be called Valvoline, while the latter will retain the name Ashland and continue to manufacture ingredients for the pharmaceutical industry.

Ashland, headquartered in Covington, Kentucky, said the move represents the final stage in its 10-year transformation from an oil refiner and marketer to a speciality chemicals company.

William Wulfsohn, Ashland's Chairman and Chief Executive, said: 'Ashland is fortunate to have two strong, but distinctly different, business platforms with attractive growth opportunities and experienced leadership teams.

'We believe that separating into two industry-leading public companies – one focused on speciality 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.'

Wulfsohn said the 'new Ashland' will become a 'solutions destination' for a wide range of consumer and industrial customers 'through the delivery of value-added technology and world-class operations'.

We believe that separating into two industry-leading public companies – one focused on speciality chemicals and the other focused on high-performance lubricants – will generate significant value for shareholders

These customers are currently served by Ashland's Chemicals Group, comprising Ashland Speciality 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 US$3.6bn in sales for the 12 months ended 30 June 2015.

The new Ashland will focus on driving growth in higher-margin, highly differentiated core product lines; leveraging the innovation pipeline by driving new product introductions; optimising the business and product portfolio; and taking a disciplined approach to capital investment.

Wulfsohn will be 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 Chief Operating Officer of the new company. Kevin Willis, currently Senior Vice President and Chief Financial Officer of Ashland, will take the same role in the new Ashland.

The separation is expected to be completed 'as soon as practicable, but not less than a year from now'.

In another announcement, Ashland said its Ashland Specialty Ingredients has completed the acquisition of the patented Zeta Fraction technology from AkzoNobel, broadening Ashland's value-added portfolio in the personal care, pharmaceutical, food and beverage, and agriculture markets. Financial terms were not disclosed.

The patented Zeta Fraction process and technology selectively isolates efficacious components from living plants and marine sources to produce a wide range of biofunctional ingredients.

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