Air Products & Chemicals Inc. said it plans to separate into two publicly traded companies by spinning off its materials-technologies business by September of next year.

Shares rose 3.1% to $143 in recent after-hours trading.

The Lehigh Valley, Pa., company said the planned split up will allow both business to focus on their core competencies and improve their competitive positions. Air Products said the decision followed an extensive review of options for the materials business by the company's board and management.

After the split, Air Products Chairman and Chief Executive Seifi Ghasemi will continue to head the remaining industrial-gases business and will be non-executive chairman of the materials business, which has yet to be named.

Guillermo Novo, currently executive vice president of the materials business, will be chief executive of the spun-off company.

Air Products in June of 2014 named Mr. Ghasemi as chairman and chief executive following activist pressure that lead his predecessor John McGlade to step down. After taking the helm, Mr. Ghasemi launched a sweeping restructuring that included the elimination of about 1,500 positions over the first nine months of the company's fiscal year, which began last October.

During July, the company reported better-than-expected earnings and issued strong guidance for the current quarter, citing in part the company's recent cost reductions.

The company plans to provide more details of the spin-off plan during a conference call set for Thursday at 8 a.m. Eastern time.

Write to Tess Stynes at tess.stynes@wsj.com

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(END) Dow Jones Newswires

September 16, 2015 17:25 ET (21:25 GMT)

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