Dow announced Dec. 9 that it would sell a 40% stake in some of its Gulf Coast infrastructure in Texas and Louisiana to Macquarie Asset Management.

The $2.4 billion deal will start a new firm, named Diamond Infrastructure Solutions, to focus on infrastructure service for Dow and industrial customers in Texas and Louisiana.

“Today's announcement demonstrates Dow’s ongoing commitment to value-maximizing actions across our portfolio,” said Jim Fitterling, chairman and CEO of Dow.

In the announcement, Dow said the company could receive up to $3 billion in the deal if Macquire decides to up its stake to 49% ownership. Dow will maintain control of the assets as majority owner.

Diamond will be comprised of power and steam production assets, pipelines, environmental operations and general site infrastructure located at five of Dow's manufacturing sites in Freeport, Texas City, and Seadrift in Texas, as well as Plaquemines and St. Charles in Louisiana.

The pipeline and storage assets are connected to major natural gas, NGL and olefin hubs along the Gulf Coast.

“As a long-term owner of essential infrastructure, we recognize the value that can be unlocked through the development of infrastructure platforms like Diamond Infrastructure Solutions,” said Ben Way, global head of Macquarie Asset Management, in the press release.

The new partnership is part of Dow’s continued evaluation to focus on chemical production and restructure the company’s ownership of non-producing assets, according to Dow.

Citi and Goldman Sachs acted as financial advisers to Dow and Linklaters provided legal support.

Comments