Kentucky-based Ashland Inc. announced that its board of directors has approved a separation into two independent companies that include chemicals and its well-known Valvoline motor oil brand.
Ashland has administrative and research and development operations in Delaware that it kept after its purchase of Hercules Incorporated.
“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 CEO. “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.”
A new Ashland will be a global leader in providing specialty chemicals. 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, 2015.
Wulfsohn will serve as 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. Fernandez-Moreno has been based in Wilmington.
Kevin Willis, currently senior vice president and chief financial officer of Ashland, will serve in the same capacity in the new Ashland.
The second company, Valvoline will focus on building the world’s leading engine and automotive maintenance business through do-it-yourself; installers; Valvoline Instant Oil Change; and International.
The brand, which soon will celebrate its 150th anniversary, generated sales of $2 billion for Ashland in the 12-month period ended June 30, 2015. Valvoline currently ranks as the #2 quick-lube chain and #3 passenger car motor oil brand in the United States.
The brand operates and franchises approximately 940 Valvoline Instant Oil Change service centers in the United States. As an independent publicly traded company, Valvoline will focus on growing its network of Valvoline Instant Oil Change stores and expand its presence in Asia, Europe, Latin America and other international markets.
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.
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.
Like DuPont, Ashland has been under pressure to restructure and maximize value to shareholders.
Ashland started out as an oil company, but later sold that business to Marathon, retaining the Valvoline business. It has acquired chemical businesses that included Hercules.
