Dow, Inc. (DOW) announced on Monday that it has finalized an agreement to divest a 40% equity interest in select infrastructure assets located along the U.S. Gulf Coast. This sale is to a fund overseen by Macquarie Asset Management, an expert in managing infrastructure and energy assets. There is an option for Macquarie to increase its stake to 49% within six months following the transaction closure.
From this initial transaction, Dow anticipates receiving approximately $2.4 billion in cash proceeds, with the potential to increase this amount to about $3.0 billion.
The agreement establishes a new partnership venture, Diamond Infrastructure Solutions, which will specialize in providing infrastructure services to Dow and other industrial clients at five locations in Texas and Louisiana. Diamond, as a dedicated infrastructure entity, will operate with a strategic emphasis on enhancing operational efficiency and expanding its customer base. The successful growth of Diamond is expected to positively impact the financial results of both Dow and Macquarie Asset Management.
The transaction is targeted to be finalized in the first half of 2025, pending customary regulatory approvals and other conditions standard to closing.
Diamond will encompass specific non-product producing assets, including facilities for power and steam generation, pipelines, environmental services, and general infrastructure, across five of Dow's U.S. Gulf Coast manufacturing sites: Freeport, Texas City, and Seadrift in Texas, as well as Plaquemine and St. Charles in Louisiana. These sites are interconnected through pipeline and storage facilities that link to key hubs for natural gas, NGL, and olefins.
Dow will remain the majority owner of Diamond, thereby retaining operational control to ensure ongoing safety and reliability.
Macquarie Asset Management brings expertise in managing industrial parks, regulated utilities, and infrastructure platforms oriented towards industrial activities.
