DuPont (DD.N) said on Thursday it will spin off its titanium dioxide unit into a separately traded public company within 18 months, yielding to intense pressure from Wall Street to divest the volatilebusiness.

Spinning off the performance chemicals business, which also sells refrigerants, would allow DuPont to focus more on specialty materials and agriculture, two growth areas.

The unit makes titanium dioxide, a popular pigment found in products ranging from car paint to sunscreen. Prices for the product, which alone accounted more than a fifth of the company＇s 2012 revenue, have been on a roller-coaster for the past several years, wildly affecting DuPont＇s profit and stock price.

"Investors love the business on the way up," DuPont Chief Executive Ellen Kullman said in a December 2012 interview with Reuters about the unit. "But investors don＇t like the turns. Turns are hard to predict in the Ti02 market."

Kullman, who ran the titanium dioxide business in the 1990s, has previously championed DuPont＇s decision to increase capacity by building a new plant due to start production by 2014.

Yet investors have agitated for months about DuPont＇s low stock price compared with those of rivals Monsanto (MON.N) and BASF (BASFn.DE). While DuPont is the second-largest seed maker after Monsanto, its stock trades at a large discount to its rival.

On several recent quarterly earnings conference calls, DuPont ＥＸＥＣutives have faced numerous questions from investors and analysts about the future of the performance chemicals business within DuPont.

As early as last year, top Wall Street analysts tracking DuPont, including Deutsche Bank＇s (DBKGn.DE) David Begleiter and BGC Partners＇ Mark Gulley, called for the company to divest the titanium dioxide business.

Earlier this summer Trian Fund Management, headed by Nelson Peltz, disclosed a stake of 5.78 million shares in DuPont, saying the stock was undervalued and had potential to grow. Peltz did not disclose publicly how he sought to increase value at DuPont, though many Wall Street analysts speculated he sought a breakup of the company or spinoff of major units.

DuPont said it has been exploring the divestment of the unit for some time. "We＇ve been exploring strategic options for Performance Chemicals for more than a year. In fact, the transformation of DuPont began in 2009 under the new management team" when Ellen Kullman became CEO, said Nick Fanandakis, DuPont＇s chief financial officer.

DuPont said its existing shareholders will own 100 percent of the performance chemicals business after the spinoff. The spinoff would likely reduce fourth-quarter earnings by a penny to 2 cents per share.

Executives have not been chosen for the new unit, though existing unit leaders, including Executive Vice President Mark Vergnano, are likely to remain, Fanandakis said in an interview.

Kullman will remain DuPont＇s CEO and no job cuts are planned for the unit＇s 7,500 workers, he said. The new company will assume a "commensurate" share of DuPont's current debt load and expects to have a low investment-grade credit rating, he said.

The spinoff will take 18 months to review unit financials, audit them, and separate other business functions, Fanandakis said.

"There's a lot of things that have to be done," he said.

The combined quarterly dividend payments of both DuPont and the spun-off company will equal the currently quarterly payout of 45 cents, DuPont said in a statement.

"It's not cutting (the dividend), it's reapportioning," Fanandakis said.

DuPont expects the new business to have annual sales of roughly $7.2 billion after the deal closes and its remaining businesses to have annual sales of $28 billion.