Covington-based chemical company Ashland Inc. announced Tuesday that it plans to spin off its Valvoline oil unit, which has been centered in Lexington for decades, in a move to create two separate publicly traded companies.
“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,” William A. Wulfsohn, Ashland’s chairman and chief executive officer. said in a statement.
The company said Wulfsohn will become chairman and CEO of the new Ashland company and non-executive chairman of Valvoline following the separation. Sam Mitchell, the current president of Valvoline, will serve as CEO of the new company while senior Ashalnd executive Luis Fernandez-Moreno will serve as chief operating officer of the new company.
The separation plan, which was approved by Ashland’s board of directors, is expected to be completed within a year, officials said.
The company said Valvoline garnered $2 billion in sales in the fiscal year that ended June 30, and operates about 940 oil change shops.
The move follows an announcement in late July that Ashland plans to build plans to build a $35 million office building on Lexington’s southeast side.
The company said the 145,000-square-foot building will be constructed by a pair of Chicago-based companies on land Ashland already owns, with completion expected in early 2017.
“This campus has been home to Valvoline for more than three decades and we’re delighted to renew our commitment to Lexington through this exciting development,” Mitchell said at the time of the announcement.
The company said it had been offered up to $1 million in support of the project by the Kentucky Cabinet for Economic Development and the Lexington-Fayette Urban County Government. The incentives would need approval council and by the Kentucky Economic Development Finance Authority.
Gov. Steve Beshear, in hailing the construction plan, said Valvoline had been in Lexington longer than 30 years and employs about 600 in the city.