COVINGTON, KENTUCKY, March 20, 2018 - Ashland Global Holdings Inc. today announced the next step on its path toward creating the premier specialty chemicals company, with a more streamlined portfolio focused on specialty ingredients and improved margins that should generate enhanced value for shareholders.
Ashland announced it will explore strategic alternatives for its Composites segment, as well as for the butanediol (BDO) manufacturing facility in Marl, Germany, and related merchant Intermediates and Solvents (I&S) products. Ashland intends to evaluate all options with respect to these assets, including a potential sale. The company plans to retain its BDO plant in Lima, Ohio, to ensure consistent supply for Ashland's internal needs.
The company expects to use proceeds from a possible sale of these assets primarily for debt reduction and share repurchases. Ashland's board of directors has approved a new $1 billion share repurchase authorization to provide flexibility. The new authorization replaces the previous authorization which had approximately $500 million remaining. Ashland intends to take action to eliminate stranded costs from a potential sale, consistent with similar past transactions.
"The decision to explore strategic options for these assets is consistent with Ashland's vision of creating the premier specialty chemicals company," said Bill Wulfsohn, Ashland chairman and chief executive officer. "Given the strong performance of these businesses, as well as recent tax reform changes, we believe it is the right time to initiate this review. With a more streamlined and focused product portfolio, improved margins and reduced earnings volatility, Ashland will be better positioned to deliver sustained earnings growth and unlock significant value for shareholders. Over the past year, we have taken specific actions to sustain and grow Ashland's premium mix while also improving our competitiveness, particularly within Specialty Ingredients. We have made important progress in a number of areas, and momentum is building. Our outlook for the year has not changed."
Wulfsohn said he expects the combination of good financing availability, low interest rates, a healthy macroeconomic environment and tax reform tailwinds to create a supportive backdrop for a potential sale of these assets.
If Ashland decides to sell these assets, it would expect to sign an agreement by the end of calendar 2018. Ashland has retained Citi to assist in this strategic review process.
About Ashland Ashland Global Holdings Inc. (NYSE: ASH) is a premier global specialty chemicals company serving customers in a wide range of consumer and industrial markets, including adhesives, architectural coatings, automotive, construction, energy, food and beverage, personal care and pharmaceutical. At Ashland, we are approximately 6,500 passionate, tenacious solvers - from renowned scientists and research chemists to talented engineers and plant operators - who thrive on developing practical, innovative and elegant solutions to complex problems for customers in more than 100 countries.
Article source: ashland.com