Ashland Inc. has announced that its board of directors has approved proceeding with a plan to separate Ashland and Valvoline into two independent, publicly traded companies. The separation is expected to be completed in less than a year’s time.
The new Ashland will become a specialty chemicals company with leading positions in fast-growing industrial markets. Valvoline will focus on being an industry-leading engine and automotive maintenance business, built on the strength of premium-branded lubricants.
“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 chief executive officer. “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.
For the new Ashland, that means becoming a ‘solutions destination’ for a wide range of consumer and industrial customers through the delivery of value-added technology and world-class operations.
For Valvoline, it means building the world’s leading engine and automotive maintenance business by providing hands-on expertise to customers around the world. Each company will be a leader in its respective industry, with the capital structure, financial resources and capital allocation strategies to drive greater revenue and earnings growth.”
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 chief operating officer of the new company. Kevin Willis, currently senior vice president and chief financial officer of Ashland, will serve in the same capacity in the new Ashland.
At Valvoline, Wulfsohn will serve as non-executive chairman following the separation, and Sam Mitchell, currently senior vice president of Ashland and president of Valvoline, will serve as CEO.
Ashland will 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 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.
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