OK
The Universal Selection Source:
Coatings Ingredients
Industry News

MWV Announces Separation of its Specialty Chemicals and Packaging Business

Published on 2015-01-14. Author : SpecialChem

 RICHMOND, Va. -- MeadWestvaco Corporation, one of the global leaders in packaging and packaging solutions, announced that its board of directors has approved a plan to fully separate its Specialty Chemicals business from the rest of the company. The separation is expected to be executed by means of a tax-free spinoff of the Specialty Chemicals business to MWV shareholders, resulting in two independent, publicly traded companies. The spinoff is expected to be completed by the end of 2015. MWV remains open to other value-creating alternatives for the Specialty Chemicals business throughout this process.

“Following a thorough strategic review process, MWV’s board and leadership team determined that a tax-free spinoff of Specialty Chemicals presents the best opportunity to create the greatest value for our shareholders,” said John A. Luke Jr., chairman and chief executive officer, MWV. “The separation of Specialty Chemicals will establish two strong companies that are better positioned to compete and profitably grow in their targeted markets. This action continues our strong record of returning value to our shareholders, which has exceeded $4 billion over the last 10 years.”

Mr. Luke continued: “This is an opportunity we have created by executing on a deliberate strategy of building MWV's businesses into packaging and specialty chemicals leaders globally. We are in a strong position to take this next step to maximize value for our shareholders. Our strong commercial progress and improved execution have put our packaging business on a sustainable path toward market-leading margins and growing cash returns. The separation of our Specialty Chemicals business, along with the organizational redesign work we are undertaking, reflects the strong commitment of our management team and board of directors to creating value for our shareholders and establishing a business model that will significantly improve the profitability and cash flow profile of our packaging business.”

MWV expects to receive cash from the spinoff that will be used primarily to pay down debt to maintain MWV’s investment grade credit rating. MWV expects to continue to pay a strong dividend, with the final rate to be determined post-separation. The company also will continue to look for opportunities to return capital to shareholders.

MWV Packaging

Following the separation, MWV will be in an excellent position to accelerate its strategy as a global leader in packaging and packaging solutions, optimally positioned to create long-term value through its market-focused strategy. Through this strategy, the company has improved its growth and profitability profile by enhancing its product mix and focusing on the most attractive opportunities in growing global packaging markets while reducing structural costs.

In conjunction with the separation of the Specialty Chemicals business, MWV is undertaking a comprehensive organization redesign to accelerate its market-focused packaging strategy and achieve market-leading margins. The actions will ensure the company has the capabilities to execute on its profitable growth strategy with an appropriately sized support structure and business model that will provide attractive total returns to shareholders.

MWV Specialty Chemicals

The Specialty Chemicals business will be well positioned to accelerate profitable growth in its megatrend aligned markets of energy, infrastructure and transportation. The business is a leading provider of performance chemicals used in printing inks, asphalt paving and adhesives, as well as in the agricultural, paper and petroleum industries. The business also produces activated carbon products used in gas vapor emission control systems for automobiles and trucks, as well as applications for air, water and food purification.

The Specialty Chemicals business will have greater ability to grow and expand its leadership positions in attractive global markets. The business is expected to extend its ‘best-in-class’ financial performance record with the appropriate capital structure to allow the new company to accelerate the pursuit of attractive profitable growth opportunities. As a stand-alone chemicals company with a strong margin profile, Specialty Chemicals will continue to be a leader among its peers.

About MWV


MeadWestvaco Corporation is one of the global packaging companies providing innovative solutions to the world’s most admired brands in the healthcare, beauty and personal care, food, beverage, home and garden, tobacco, and agricultural industries. The company also produces specialty chemicals for the automotive, energy, and infrastructure industries and maximizes the value of its development land holdings. MWV’s network of 125 facilities and more than 15,000 employees spans North America, South America, Europe and Asia. 

Source: MWV


Halcyon Group 3rd R&D Innovation Summit
Back to Top