MeadWestvaco (MWV) plans to spin off its specialty chemicals business, as the packaging company responds to criticism from activist shareholder Starboard Value LP. The tax-free spinoff is expected to be completed by the end of 2015.
“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.”
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. Source
