Ashland Inc.’s $1.8 Billion Sale of Water Technologies Business to Clayton, Dubilier & Rice

On February 18, 2014, Ashland Inc. announced it has signed a definitive agreement to sell Ashland Water Technologies to a fund managed by Clayton, Dubilier & Rice in a transaction valued at approximately US$1.8 billion. Cravath represented Ashland in connection with this transaction, which is expected to close by the end of Ashland’s fiscal year on September 30, 2014, contingent on certain customary regulatory approvals, standard closing conditions and completion of required employee information and consultation processes.

The company expects net proceeds from the sale to total approximately US$1.4 billion, which primarily will be used to return capital to shareholders in the form of share repurchases. In keeping with this intent, Ashland’s board of directors has authorized a US$1.35 billion common stock repurchase program, effective immediately. This new authorization replaces Ashland’s previous US$600 million buyback program, which had approximately US$450 million remaining. The new repurchase program will expire December 31, 2015.

The Cravath team included partners Susan Webster and Thomas E. Dunn and associates Christopher K. Couvelier and Ankur N. Patel on M&A matters; partner George E. Zobitz and senior attorney Christopher J. Kelly on banking matters; partners Stephen L. Gordon and Lauren Angelilli and associate Edward A. McGehee on tax matters; partner Eric W. Hilfers and associate Matthew Cantor on executive compensation and benefits matters; partner David J. Kappos and associate Benjamin D. Landry on intellectual property matters; partner Peter T. Barbur and associate Derek Musa on antitrust matters; senior attorney Annmarie M. Terraciano on environmental matters; and practice area attorney Gary R. Eisenman on real estate matters. Andrew K. Jennings and Martin T. Mohr also worked on M&A and tax matters, respectively.