Ashland Inc. announced plans Tuesday to separate into two independent, publicly traded companies.
Ashland will be a premier specialty chemicals company in consumer and industrial markets. Valvoline will be an engine and automotive maintenance business, built on premium-branded lubricants.
The separation is expected to be completed "as soon as practicable," the news release stated, but not less than a year from now.
The company intends for the separation, which is subject to final board approval prior to completion, to be tax-free for Ashland shareholders. Following the separation, Ashland shareholders will own shares of both the new Ashland and Valvoline.
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The separation of Ashland and Valvoline "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," the news release said.
"Ashland is fortunate to have two strong, but distinctly different, business platforms with attractive growth opportunities and experienced leadership teams," William A. Wulfsohn, Ashland chairman and chief executive officer, said in the news release.
"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. ... 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 be chairman and CEO of the new Ashland. He will also be non-executive chairman of Valvoline. Sam Mitchell, now senior vice president of Ashland and president of Valvoline, will be Valvoline's CEO.
Ashland will begin separating its specialty chemicals and Valvoline businesses while it finalizes the transaction structure and obtains regulatory and other approvals.
Ashland's specialty chemicals business had about $3.6 billion in sales in the 12 months ended June 30, while the Valvoline brand had revenue of $2 billion in the period.
In August, Ashland announced plans to build a $35 million, 145,000-square-foot office building in Lexington to house its Valvoline unit and other Ashland corporate employees.
The planned building will sit on the existing Ashland campus between Blazer Parkway and Palumbo Drive. Construction is scheduled to begin this fall, with completion by February 2017.
Ashland spokesman Gary Rhodes said the announcement will have no impact on construction.
"Project work is continuing, and the timetable has not changed," Rhodes said in an email message.