* To use proceeds to fund $1.35 bln share buyback program
* Shares up 2.3 pct in early trading
Feb 18 U.S. chemical manufacturer Ashland Inc
, which is under pressure from activist investor Jana
Partners, said it would sell its water technologies unit to a
fund managed by Clayton, Dubilier & Rice for about $1.8 billion.
Ashland shares rose 2.3 percent to $98.40 in early trading.
The Valvoline motor oil maker said it would use the net
proceeds of $1.4 billion to fund a $1.35 billion share buyback
program also announced on Tuesday.
Ashland and other large U.S. chemical companies, including
DuPont and Dow Chemical Co, are facing investor
pressure to increase shareholder value by exiting cyclical
businesses and focusing on units that generate higher margins.
"This divestiture allows us to focus on our core specialty
chemicals business and to accelerate return of capital to
shareholders ... ," said Ashland's Chief Executive James O'Brien
said in a statement.
Reuters reported last November that Ashland was in talks
with at least seven private equity firms for its water
Ashland's water treatment business supplies chemicals to
industries such as pulp, paper and mining.
The unit, which generates annual sales of $1.7 billion and
employs about 3,000 people worldwide, also makes biocides,
coagulants and wood adhesives.
Ashland said the repurchase program replaces its previous
$600 million buyback program and will expire at the end of 2015.
The deal is expected to close by the end of Ashland's fiscal
year ending Sept. 30.