- A fund managed by Macquarie Asset Management to acquire an
initial 40% stake in select Dow U.S. Gulf Coast infrastructure
assets 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
- Diamond Infrastructure Solutions will leverage Dow's
operational excellence and Macquarie Asset Management's
world-leading infrastructure expertise to generate growth
opportunities by opening access to Dow's U.S. Gulf Coast sites to
third party customers
- Proceeds to be deployed towards higher value-creating growth
investments
MIDLAND,
Mich., Dec. 9, 2024 /PRNewswire/ -- Dow
(NYSE: DOW) today announced 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, a leading global infrastructure and energy asset
manager.
This new partnership, Diamond Infrastructure
Solutions ("Diamond"), will be a specialist infrastructure
provider to Dow and other industrial customers at its five
locations in Texas and
Louisiana, offering comprehensive
services to its tenants with a focus on world class efficiency,
reliability and safety. 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 expects to receive initial cash proceeds of approximately
$2.4 billion based on the sale
of its 40% minority equity stake with the potential to
generate cash proceeds up to approximately $3.0 billion for a 49% minority equity
stake. Macquarie Asset Management will have the option to increase
its equity share to 49% within six months of closing. 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.
"Today's announcement demonstrates Dow's ongoing commitment to
value maximizing actions across our portfolio," said
Jim Fitterling, chair and chief executive officer of Dow.
"This transaction further strengthens our financial flexibility and
enables continued cash deployment towards the most attractive
opportunities that will create long-term value for our
stakeholders. We are confident that Macquarie is the right
industrially minded partner due to our shared values to ensure the
ongoing safe and reliable operations of these assets to support Dow
and industrial customers across the U.S. Gulf Coast."
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 is a leading global infrastructure
asset manager with a focus on operational excellence. It
prioritizes investments in high quality, essential assets that can
be improved over time and deliver growth and reliable service to
customers, as well as the health and safety of employees. Macquarie
Asset Management has specific experience in managing and operating
industrial parks, regulated utilities and other industry-oriented
infrastructure platforms.
"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. "We believe that our significant
infrastructure experience and capabilities, coupled with Dow's
operational excellence, will deliver additional efficiencies and
long-term growth."
This transaction is another step in Dow's continued actions to
evaluate its ownership of non-product producing assets across its
global portfolio. It builds on 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.
Citi and Goldman Sachs acted as financial advisor to Dow, and
Linklaters provided legal support.
About Dow
Dow (NYSE: DOW) is one of the world's
leading materials science companies, serving customers in
high-growth markets such as packaging, infrastructure, mobility and
consumer applications. Our global breadth, asset integration
and scale, focused innovation, leading business positions and
commitment to sustainability enable us to achieve profitable growth
and help deliver a sustainable future. We operate manufacturing
sites in 31 countries and employ
approximately 35,900 people. Dow delivered sales of
approximately $45 billion in 2023. References to Dow or
the Company mean Dow Inc. and its subsidiaries. Learn more about us
and our ambition to be the most innovative, customer-centric,
inclusive and sustainable materials science company in the world by
visiting www.dow.com.
Cautionary Statement about Forward-Looking Statements
Certain statements in this press release are "forward-looking
statements" within the meaning of the federal securities laws,
including Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements often address expected future business and
financial performance, financial condition, and other matters, and
often contain words or phrases such as "anticipate," "believe,"
"estimate," "expect," "intend," "may," "opportunity," "outlook,"
"plan," "project," "seek," "should," "strategy," "target," "will,"
"will be," "will continue," "will likely result," "would" and
similar expressions, and variations or negatives of these words or
phrases.
Forward-looking statements are based on current assumptions and
expectations of future events that are subject to risks,
uncertainties and other factors that are beyond Dow's control,
which may cause actual results to differ materially from those
projected, anticipated or implied in the forward-looking statements
and speak only as of the date the statements were made. These
factors include, but are not limited to: sales of Dow's products;
Dow's expenses, future revenues and profitability; any global and
regional economic impacts of a pandemic or other public
health-related risks and events on Dow's business; any sanctions,
export restrictions, supply chain disruptions or increased economic
uncertainty related to the ongoing conflicts between Russia and Ukraine and in the Middle East; capital requirements and need for
and availability of financing; unexpected barriers in the
development of technology, including with respect to Dow's
contemplated capital and operating projects; Dow's ability to
realize its commitment to carbon neutrality on the contemplated
timeframe, including the completion and success of its integrated
ethylene cracker and derivatives facility in Alberta, Canada; size of the markets for Dow's
products and services and ability to compete in such markets;
failure to develop and market new products and optimally manage
product life cycles; the rate and degree of market acceptance of
Dow's products; significant litigation and environmental matters
and related contingencies and unexpected expenses; the success of
competing technologies that are or may become available; the
ability to protect Dow's intellectual property in the United States and abroad; developments
related to contemplated restructuring activities and proposed
divestitures or acquisitions such as workforce reduction,
manufacturing facility and/or asset closure and related exit and
disposal activities, and the benefits and costs associated with
each of the foregoing; fluctuations in energy and raw material
prices; management of process safety and product stewardship;
changes in relationships with Dow's significant customers and
suppliers; changes in public sentiment and political leadership;
increased concerns about plastics in the environment and lack of a
circular economy for plastics at scale; changes in consumer
preferences and demand; changes in laws and regulations, political
conditions or industry development; global economic and capital
markets conditions, such as inflation, market uncertainty, interest
and currency exchange rates, and equity and commodity prices;
business, logistics, and supply disruptions; security threats, such
as acts of sabotage, terrorism or war, including the ongoing
conflicts between Russia and
Ukraine and in the Middle East; weather events and natural
disasters; disruptions in Dow's information technology networks and
systems, including the impact of cyberattacks; and risks related to
Dow's separation from DowDuPont Inc. such as Dow's obligation to
indemnify DuPont de Nemours, Inc. and/or Corteva, Inc. for certain
liabilities.
Where, in any forward-looking statement, an expectation or
belief as to future results or events is expressed, such
expectation or belief is based on the current plans and
expectations of management and expressed in good faith and believed
to have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished. A
detailed discussion of principal risks and uncertainties which may
cause actual results and events to differ materially from such
forward-looking statements is included in the section titled "Risk
Factors" contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 2023, and
the Company's subsequent Quarterly Reports on Form 10-Q. These are
not the only risks and uncertainties that Dow faces. There may be
other risks and uncertainties that Dow is unable to identify at
this time or that Dow does not currently expect to have a material
impact on its business. If any of those risks or uncertainties
develops into an actual event, it could have a material adverse
effect on Dow's business. Dow Inc. and The Dow Chemical Company and
its consolidated subsidiaries assume no obligation to update or
revise publicly any forward-looking statements whether because of
new information, future events, or otherwise, except as required by
securities and other applicable laws.
About Macquarie Asset Management
Macquarie Asset Management is a global asset manager, integrated
across public and private markets. Trusted by institutions,
governments, foundations and individuals to manage approximately
$US633.7 billion in assets, we
provide a diverse range of investment solutions including real
assets, real estate, credit and equities &
multi-asset.
Macquarie Asset Management is part of Macquarie Group, a
diversified financial group providing clients with asset
management, finance, banking, advisory, and risk and capital
solutions across debt, equity and commodities. Founded in 1969,
Macquarie Group employs over 20,600 people in 34 markets and is
listed on the Australian Securities Exchange.
All figures as at 30 September 2024.
Important Notices (Macquarie Asset Management): None of the
entities noted in this media release is an authorised
deposit-taking institution for the purposes of the Banking Act 1959
(Commonwealth of Australia) and
the obligations of these entities do not represent deposits or
other liabilities of Macquarie Bank Limited ABN 46 008 583 542
(Macquarie Bank). Macquarie Bank does not guarantee or otherwise
provide assurance in respect of the obligations of these entities.
In addition, if this media release relates to an investment (a)
each investor is subject to investment risk including possible
delays in repayment and loss of income and principal invested and
(b) none of Macquarie Bank or any other Macquarie Group company
guarantees any particular rate of return on or the performance of
the investment, nor do they guarantee repayment of capital in
respect of the investment.
For further information, please contact:
Rachelle Schikorra
ryschikorra@dow.com
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SOURCE The Dow Chemical Company