Ashland Inc. said its board approved its plan to separate into two publicly traded companies, which the company said marks a final step in its decadelong transition.

Shares rose 5.9% to $112 in recent premarket trading.

One business, which will keep the Ashland name, will focus on driving growth in higher-margin specialty chemicals. The second company will consist of its Valvoline engine and automotive maintenance business, based on its lubricant brand.

Covington, Ky.-based Ashland said the specialty chemicals company will includes it specialty ingredients and performance materials businesses, with generated a combined $3.6 billion of sales during the year ended June 30.

Ashland Chairman and Chief Executive William A. Wulfsohn will have the same roles at the new Ashland following the separation, which is expected to take at least a year.

Valvoline, which includes its instant oil-change business and the motor oil brand, generated roughly $2 billion of revenue in the 12 months through June. The new company will focus on add to its network of Valvoline Instant Oil Change stores to increase its market share and expand its presence in Asia, Europe, Latin America and other international markets.

Sam Mitchell, currently senior vice president of Ashland and president of Valvoline, will serve as CEO. Mr. Wulfsohn will be the nonexecutive chairman.

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

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(END) Dow Jones Newswires

September 22, 2015 09:05 ET (13:05 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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