US chemical producer Ashland has announced it will spin off its engine lubricants subsidiary Valvoline in a tax-free transaction to shareholders. The separation is expected to take at least a year to complete.

Going forward, the lubricants business will be publicly listed, and Ashland will consist solely of its Specialty Ingredients and Performance Materials segments, which had sales of around $3.6 billion in fiscal 2015, which ended on Jun. 30.

In a statement, the company to be headed by William Wulfsohn as chairman and current senior vice president Luis Fernandez-Moreno as CEO, said the spinoff is the final step in its decades-long shift from an oil refiner to a specialty chemicals manufacturer.

In July of this year, Ashland completed the sale of Valvoline’s car-care products to Niteo, a subsidiary of private equity firm Highlander Partners. This business represented less than 4% of Valvoline's $2 billion annual sales.

In late May, Ashland announced plans to sell the industrial biocides assets – about 2% of the Specialty Ingredients segment’s sales – to Troy Corporation, a global leader in microbial control products and performance additives. Financial terms were not disclosed.

The specialty chemicals producer had recently been under pressure from activist investor Jana Partners to trim assets and boost its share price. Jana exited the company in May of this year.