Johnson Matthey is to spin off its US electronics materials business to focus on its more profitable speciality chemicals operations. It has spent £370m on acquisitions in the electronics division.
The decision to divest the electronic materials business follows a strategic review by chief executive Chris Clark, who took over during the summer.
He said it was time the City recognised the value in Johnson Matthey and the divestment of the electronic materials division would help to do this.
Last week the shares were trading at 392p, compared with over 680p a year ago.
The business, which specialises in semi-conductor chips, has been badly affected by the worldwide glut. Half-year figures slumped 29% to £12.7m at the division, in sharp contrast to the rest of the group which managed a 9% improvement in profits from £58.2m to £63.2m at the interim stage.
The catalysts and chemicals operations saw profits rise 24% to £35.1m, on sales of £331.2m a rise of 27%.
Johnson Matthey had identified numerous growth opportunities in catalysts and chemicals, Clark said, two separate businesses which are being merged into a single organisation.