RICHMOND, Va. — MeadWestvaco's board has approved plans to spin off its specialty chemicals business into a separate, publicly traded company.
"The separation of specialty chemicals will establish two strong companies that are better positioned to compete and profitably grow in their targeted markets," Chairman and CEO John A. Luke Jr. said in a statement on Thursday.
MeadWestvaco also provides packaging for brands in the health care, beauty and personal care, food, beverage, home and garden, tobacco and agricultural industries.
The specialty chemicals business is a 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.
MeadWestvaco Corp. said that it is open to other value-creating options for the specialty chemicals business during the separation process. The Richmond, Virginia-based company also said that it anticipates receiving cash from the spinoff that will mostly be used to pay down debt to maintain its investment grade credit rating.
The spinoff is expected to be completed by year's end.
MeadWestvaco's news is similar to an announcement by The DuPont Co. in 2013 that it was spinning off its performance chemicals unit.
Its shares finished $43.09 on Wednesday. Its shares have risen more than 18 percent over the past year through Wednesday's close.