Dow (NYSE: DOW) has recently announced a new partnership with Macquarie Asset Management, where a fund managed by Macquarie Asset Management will acquire an initial 40% stake in select Dow U.S. Gulf Coast infrastructure assets. This transaction is expected to bring in initial cash proceeds of approximately $2.4 billion for Dow, with the potential to reach up to approximately $3.0 billion in total.
The new partnership, named Diamond Infrastructure Solutions, will leverage Dow’s operational excellence and Macquarie Asset Management’s infrastructure expertise to open access to Dow’s U.S. Gulf Coast sites to third-party customers, aiming to generate growth opportunities. The proceeds from this transaction will be deployed towards higher value-creating growth investments.
Diamond Infrastructure Solutions comprises certain non-product producing assets located at five of Dow’s manufacturing sites in the U.S. Gulf Coast: Freeport, Texas City, Seadrift in Texas, as well as Plaquemine and St. Charles in Louisiana. These assets include power and steam production, pipelines, environmental operations, and general site infrastructure.
This move aligns with Dow’s strategy to evaluate its ownership of non-product producing assets across its global portfolio. It follows the previous sale of the company’s rail infrastructure assets at six North American sites in September 2020 and the sale of its U.S. Gulf Coast marine and terminal operations and assets in December 2020.
Dow's CEO, Jim Fitterling, expressed confidence in the partnership, emphasizing the commitment to value maximizing actions across Dow's portfolio and the potential for long-term value creation for stakeholders. Ben Way, the Global Head of Macquarie Asset Management, highlighted the value that can be unlocked through the development of infrastructure platforms like Diamond Infrastructure Solutions, emphasizing additional efficiencies and long-term growth.
This strategic partnership is expected to close in the first half of 2025, subject to customary regulatory approvals and other closing conditions. Dow was advised by Citi and Goldman Sachs as financial advisors, with legal support provided by Linklaters.
Dow is a leading materials science company, serving customers in high-growth markets such as packaging, infrastructure, mobility, and consumer applications. In 2023, Dow delivered sales of approximately $45 billion. Following these announcements, the company's shares moved 2.5%, and are now trading at a price of $43.05. If you want to know more, read the company's complete 8-K report here.
