Ashland said it would sell its distribution business to a unit of private equity firm TPG for $930 million, as it shifts focus to higher-margin specialty chemicals. Ashland has been moving away from the cyclical commodity chemicals sector and bought specialty chemicals and water technologies company Hercules for $2.6 billion in 2008.

Strong results last month from Bayer, Dow Chemical and BASF indicated demand for chemicals continues to improve across the globe. Ashland's deal with TPG Capital, expected to close before end-March, comes three months after Reuters first reported Ashland was looking to sell the business.

Ashland CEO James O'Brien said in a statement that the deal "completes a major step in our multi-year transformation into a high-performing specialty chemicals company."

The unit, which distributes chemicals, plastics, composite materials and environmental services in North America, and thermoplastics in Europe, accounted for more than 38% of Ashland's fourth-quarter revenue of $2.38 billion. While sales at the unit were up 18% from a year ago,they dipped below the third quarter.

Shares of Covington, Kentucky-based Ashland, valued at just over $4 billion, were up 2% at $52 in pre-market trade. The stock, which closed at $50.94 on Friday on the New York Stock Exchange, is up more than 30% year-to-date.

As of September, Ashland had cash of $417 million and long-term debt of $1.1 billion.