updated 8/21/2006 4:20:58 PM ET 2006-08-21T20:20:58

Chemicals company Ashland Inc. on Monday said it has agreed to sell the stock of subsidiary Ashland Paving and Construction Inc. to Oldcastle Materials Inc. for $1.3 billion.

Ashland said it expects proceeds of $1.25 billion. However, the final sale price may be adjusted for changes in working capital and certain other accounts from Sept. 30 until the deal closes.

The company said it intends to use the proceeds to fund its stock repurchase program, including up to 10 million shares, and distribute a special cash dividend.

Chairman and Chief Executive James J. O'Brien said the sale of its paving and construction business "sharpens its focus on its future as a diversified chemical company." After the sale, Ashland will operate four chemicals businesses: performance materials, distribution, Valvoline and water technologies.

The transaction has received antitrust clearance and is expected to close at the end of the month.

Oldcastle Materials is a unit of international building materials group CRH PLC of Dublin, Ireland.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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