Specialty chemicals company Rockwood Holdings said Tuesday it is selling off five of its nonstrategic businesses, including two paint pigments units, to rival chemicals manufacturer Huntsman Corporation.

The deal is worth $1.325 billion, including the assumption of $225 million in pension obligations by Huntsman, which is based in Salt Lake City and The Woodlands, Texas. The deal is expected to close in the first half of 2014, pending regulatory approvals, at which point Huntsman will become the world's second-largest producer of titanium dioxide pigment behind DuPont.

One of the units Huntsman is acquiring focuses on the production of titanium dioxide, which is used as a white pigment in products ranging from paints and cosmetics to food coloring. The other businesses changing hands include a pigments unit that makes a wide range of color pigments used in construction, paint, and plastic products. Businesses that focus on wood protection chemicals, thermoplastics, and water additives constitute the remainder of the acquisition, which Huntsman expects will result in roughly $130 million in annual savings by the end of 2015.

Once it combines Rockwood's pigment businesses with its own, Huntsman said in its announcement of the deal, it plans to launch an initial public offering of that unit within two years in order to "further unlock value" from the businesses.

For its part, Rockwood said in its deal announcement that the sale is part of the Princeton-based company's previously announced strategy to increase shareholder value by focusing on its core businesses, including its lithium unit.

Vinson & Elkins is serving as legal counsel to Huntsman, whose founder and executive chairman is Jon Huntsman Sr.—the father of 2012 Republican presidential candidate Jon Huntsman Jr. The V&E team is led by Houston-based M&A partners Jeffery Floyd and Stephen Gill. Also advising from V&E: M&A partner Edward "Ted" Stockbridge, environmental partner Larry Nettles, compensation and benefits partner David D'Alessandro, antitrust partner William Vigdor, employment partner Sean Becker, tax partner John Lynch, IP partner Peter Mims, real estate counsel E. Scot Dixon, and real estate of counsel Sanford "Sandy" Weiner. Corporate governance partner David Johnson and white-collar partner William Lawler III are advising on regulatory matters.

The firm has advised Huntsman on a variety of past transactions, including on the company's $1.5 billion IPO in 2005. V&E also worked for Huntsman in connection with Apollo Management's aborted attempt to buy the company in 2007, as well as on the subsequent fraud lawsuit Huntsman brought against Apollo for pulling out of that $6.5 billion deal. (Apollo and its Hexion Specialty Chemicals unit agreed to pay Huntsman $1 billion as part of a 2008 settlement.)

V&E associates on the deal with Rockwood are L. Prentiss Cutshaw, Kevin Davis, Lina Dimachkieh, Matthew Dobbins, Bobak Fatemizadeh, Han Gao, Matthew Greenberg, Guy Gribov, Lavonne Hopkins, Devika Kornbacher, Martin Luff, Adam Lyons, Kai Haakon Liekefett, Zachary Rider, John Rosenkild, Kelly Sanderson, Rochelle Thomas, Mark Wang, and Jared Whalen. Huntsman's general counsel is David Stryker, a former Kirkland & Ellis partner.

Weil, Gotshal & Manges is representing Bank of America Merrill Lynch in its role as financial adviser to Huntsman on the transaction with Rockwood. Weil M&A cochair Howard Chatzinoff is advising along with associate Damali Peterman.

Meanwhile, attorneys at Hughes Hubbard & Reed and Willkie Farr & Gallagher are advising Rockwood on the sale of its units to Huntsman. The Hughes Hubbard team includes corporate partner James Modlin as well as corporate counsel Daniel Litowitz and Wayne Josel. Tax partner Andrew Braiterman, employee benefits partner Spencer Harrison, environmental law partner Susan Campbell, and tax counsel Alexander Anderson are also advising from that firm. Hughes Hubbard associates on the matter are Erin DeCecchis, Justin Greenbaum, Jillian Kane, Christine Lamsvelt, Alison Peyser, and Michael Traube.

For Willkie, Frankfurt-based corporate partner Georg Linde is leading a team advising Rockwood, which has manufacturing sites located throughout Asia, Europe, and the United States. Corporate partners Annette Péron and Maurizio Delfino are also working on the deal, along with tax partner Patrick Meiisel, employment national partner Christian Rolf, and special European counsel Gregory de Saxcé.

Both Hughes Hubbard and Willkie have advised Rockwood on a number of past transactions, with the former helping the company unload a plastic compounding unit to Mexichem in a 2010 deal worth $300 million. And earlier this summer, Willkie partner Linde led the way for Rockwood on the $635 million sale of its rheology business to Altana Group as well as on the $1.98 billion sale of ceramics unit CeramTec to private equity buyer Cinven.

Skadden, Arps, Slate, Meagher & Flom also claimed a role on the deal, serving as antitrust counsel to Rockwood with a team that includes antitrust partners Steven Sunshine, Simon Baxter, and Matthew Hendrickson as well as associate Steven Albertson.