Ashland Mulls Sale of German BDO Facility and Composites Business

US chemicals maker, Ashland, is exploring the sale of its composites segment which makes unsaturated polyester resins, as well as a butanediol (BDO) facility in Marl, Germany, and related merchant Intermediates and Solvents (I&S) products.

Ashland said it intends to evaluate “all options, including a potential sale”. It added that the review is aimed at creating a more focused specialty chemicals company and enhancing shareholder value. If Ashland decides to sell these assets, it expects to sign an agreement by the end of 2018. Ashland has retained Citi to assist in this strategic review process. The company plans to retain its BDO plant in Lima, Ohio (USA), to ensure consistent supply for its internal needs.

The I&S business unit supplies 1-4 butanediol (BDO), tetrahydrofuran (THF), N-methyl-pyrrolidone (NMP) and gamma-butyrolactone (GBL) in addition to other downstream products. The company’s ‘Specialty Ingredients’ segment makes chemicals used in cosmetics, food, pharmaceuticals, adhesives and coatings.

Ashland said the possible sale of the Composites segment will allow it to focus on ‘Specialty Ingredients’, which should provide the company with higher margins.

“The decision to explore strategic options for these assets is consistent with Ashland’s vision of creating the premier speciality chemicals company,” said Mr. Bill Wulfsohn, Ashland Chairman and CEO. “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 segment,” he added.

The company said it expects to use proceeds from a possible sale of the assets primarily for debt reduction and share repurchases.