27 November 2018
27 November 2018
Ashland has signed a definitive agreement to sell its Composites business and the butanediol (BDO) manufacturing facility in Marl, Germany, to INEOS Enterprises in a transaction valued at approximately US$1.1 billion.
The transaction is expected to close prior to the end of the June 2019 quarter.
Ashland expects net proceeds from the sale to total approximately $1 billion and anticipates that proceeds primarily will be used for debt reduction.
Ashland's Composites unit is a global leader in unsaturated polyester resins, vinyl ester resins and gelcoats, while the BDO facility in Germany and related merchant products included in the agreement are part of Ashland's Intermediates and Solvents (I&S) segment. Ashland's Composites and Marl BDO facility have combined sales of more than $1.1 billion per year and approximately 1,300 employees. Ashland will retain its BDO plant in Lima, Ohio, US, to ensure consistent supply for the company's internal needs.
"Composites and Marl are outstanding businesses with strong market positions and high-performing teams," says Bill Wulfsohn, Ashland Chairman and CEO. "At the same time, the divestiture of these businesses is consistent with Ashland's vision of becoming the premier speciality chemicals company. 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 two years, we have taken specific actions to sustain and grow Ashland's premium mix while also improving our competitiveness, particularly within Specialty Ingredients. These actions are driving strong earnings growth, as evident in our fiscal 2018 financial results."
Privately-owned INEOS is one of the world's largest manufacturers of chemicals and oil products, with annual sales of $60 billion and approximately 20,000 employees. The London-based company operates 171 sites in 24 countries.
"We believe that the Ashland Composites business will have great potential for growth under INEOS ownership and we are looking forward to working with a great team of people who are determined to meet the developing needs of our customers," states Ashley Reed, CEO, INEOS Enterprises.
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