Ashland spin-off creates more focused consumer specialty chemicals business
The spin-off will create two independent, publicly traded companies that will rebrand Ashland as a purely specialty chemicals business, while the newly named Valvoline will be a leader in the engine and automotive maintenance area with a core focus in lubricants.
The company says that the decision is the result of a comprehensive strategic planning operation by its global leadership team that has defined ways of enhancing the business and to ultimately refine it as a defined specialty chemical business.
A long road to re-branding as a specialty chemicals business
Over the course of the last decade Ashland has been rebranding itself from an oil refining business into the specialty chemicals space, and the newly defined business is the culmination of a series of divestitures and acquisitions directed towards that area.
"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.”
Ultimately executives at the company believe that both the businesses can move forward to become category leaders in their specific core focuses, giving them the necessary resources for revenue and earnings growth.
Specialty chemicals will keep its existing structure
The newly defined Ashland specialty chemicals business will continue to be a part of the company’s Chemical Group, defined by its two existing divisions – Specialty Ingredients, Performance Materials.
As well as the cosmetics and personal care space, this business also serves the food and beverage, architectural coatings, adhesives, automotive, construction and energy categories, accounting for total sales of $3.6bn in the 12 months ending June 2015.
According to Ashland executives, the renewed focus of the specialty chemicals business will be on higher-margin, highly differentiated core product lines that will be enhanced by a busy product innovation line driving frequent new product launches.
Wulfshon heads up both businesses
Wulfsohn will continue to serve as chairman and CEO of the business 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.
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.
