Ecolab Plans To Spin Off Its Upstream Energy Business By Mid-year 2020

(RTTNews) - Ecolab Inc. (ECL) announced it plans to spin off its Upstream energy businesses as a stand-alone publicly-traded company. The company plans to retain the Downstream business, which serves refineries and petrochemical plants. The separation transaction is expected to be a tax-free spin-off to U.S. shareholders. Ecolab expects to maintain its current dividend and continue to grow it in the future. The company also expects to maintain A-range credit metrics following the separation of the Upstream Energy business.

Ecolab also announced that it has raised the goal for its previously announced efficiency initiative. The anticipated benefits of the efficiency initiative are now estimated to be $325 million compared with the company's previous forecast of $200 million. Ecolab now expects total pretax charges related to its efficiency initiative to be approximately $260 million ($190 million after tax) with approximately $325 million of pre-tax savings by 2021, not reflecting any impacts from the planned separation of the Upstream Energy business.

For fourth quarter, Ecolab expects earnings per share to be $1.48; adjusted diluted earnings per share, excluding special gains and charges and discrete tax items, to increase 12% to $1.54. For full year 2018, Ecolab expects earnings per share to be $5.01; adjusted diluted earnings per share to rise 12% to $5.25.

For 2019, Ecolab expects adjusted earnings per share to rise 10% to 14% to the $5.80 to $6.00 range, excluding special gains and charges and discrete tax items.