MIDLAND (dpa-AFX) - Dow, Inc. (DOW) announced Monday that it has entered into a definitive agreement to sell a 40% equity stake in select U.S. Gulf Coast infrastructure assets to a fund managed by Macquarie Asset Management, an infrastructure and energy asset manager, with an option to increase its equity stake to 49% within six months of closing.
Dow is expected to receive initial cash proceeds of approximately $2.4 billion based on the initial transaction, with potential to receive up to approximately $3.0 billion in total.
This new partnership formed through the deal, Diamond Infrastructure Solutions, will be a specialist infrastructure provider to Dow and other industrial customers at its five locations in Texas and Louisiana.
As a dedicated infrastructure company, Diamond will be a new business model with greater strategic focus on operational efficiencies and new customer acquisition. Profitable growth for Diamond will benefit both Dow and Macquarie Asset Management's future bottom-line results.
Dow and Macquarie Asset Management expect to close the transaction in the first half of 2025, subject to customary regulatory approvals and other closing conditions.
Diamond is comprised of certain non-product producing assets (power and steam production, pipelines, environmental operations and general site infrastructure) located at five of Dow's manufacturing sites in the U.S. Gulf Coast (USGC): Freeport, Texas City, and Seadrift in Texas, as well as Plaquemine and St. Charles in Louisiana. Pipeline and storage assets span across the USGC with connections to major natural gas, NGL and olefin hubs.
Dow will maintain control as the majority owner of Diamond to help ensure the continuity of safe and reliable operations.
Macquarie Asset Management has specific experience in managing and operating industrial parks, regulated utilities and other industry-oriented infrastructure platforms.
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