Ashland Sells APAC, Vows to Keep Valvoline


Ashland Inc.Monday sold road-building subsidiary Ashland Paving and Construction Inc. – its second major divestment in 14 months. Flush with cash, Ashland is now looking for businesses to buy, but officials indicated they are not targeting companies that would tack on to Valvoline. They added, however, that they have no plans to sell the motor oil marketer.

Ashland sold APAC for $1.3 billion to Oldcastle Materials Inc., a supplier of paving materials and services. Ashland had returned the subsidiary to profitability recently, but management said it decided to sell APAC because it expects budget constraints to limit the number of transportation projects in the near future and because it did not consider road-building a core activity.

In July of 2005, Ashland sold its 38-percent stake in refining joint venture Marathan Ashland Petroleum for $3.7 billion. After those two divestments, Ashland has four divisions: Valvoline, chemical supplier Ashland Performance Materials; chemical distributor Ashland Distribution; and Ashland Water Technologies.

In discussing the parent companys position after the APAC sale, officials suggested they would like to make around $2 billion-worth of acquisitions, but said they are focusing on activities related to their chemicals businesses.

The areas that we are most interested in [are] adhesive[s], the composites and water [treatment], Chief Financial Officer and Senior Vice President Marvin Quin said. He added that opportunities are somewhat limited and that pricing for available businesses is somewhat high.

But even if Ashland doesnt buy operations to add on to Valvoline, the parent company says it is committed to keeping Valvoline in its fold.

Our management has said that Valvoline has some real marketing expertise that we hope to leverage across our other businesses, so it is an integral part of Ashland, spokesman Jim Vitak told Lube Report yesterday. Were committed to working on the businesses we have now, and that includes Valvoline.

Based in Lexington, Ky., Valvoline is one of the worlds two largest independent lubricant suppliers. The other is Fuchs Petrolub AG, of Mannheim, Germany.

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