Ashland has announced that its board of directors has approved proceeding with a plan to separate Ashland into two independent, publicly traded companies. The announcement follows a comprehensive strategic planning review by the company's global leadership team to better understand Ashland's markets, customers and the opportunities for each business to create the most value for shareholders, customers and employees. It also represents the final step in Ashland's more than decade-long transformation from an oil refiner and marketer to a specialty chemicals company, during which the company completed dozens of acquisitions and divestitures.
"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." said William A. Wulfsohn, Ashland Chairman and CEO.
The New Ashland
The new Ashland will be a global provider of 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 US$3.6 billion 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 where the company helps customers succeed; 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 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.
Valvoline will focus on building an engine and automotive maintenance business by providing hands-on expertise to customers in each of its primary market channels: Do-It-Yourself (DIY); installers; Valvoline Instant Oil Change; and International. The globally recognised brand, which soon will celebrate its 150th anniversary, generated sales of US$2 billion for Ashland in the 12-month period ended 30 June 2015. 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, leveraging the Valvoline brand across multiple channels to capture new market share, and expanding its presence in Asia, Europe, Latin America and other international markets.
Edited from press release by Angharad Lock