Dow to Sell 40% of Assets for $2.4 Billion in 2025

Dow Chemical Company recently announced that it has officially signed an agreement to sell 40% ownership of certain infrastructure assets located along the U.S. Gulf Coast to a fund managed by Macquarie Asset Management. This transaction is expected to generate approximately $2.4 billion in initial cash proceeds and is anticipated to be completed in the first half of 2025.

Under the agreement, both parties will jointly establish a new joint venture named Diamond Infrastructure Solutions (referred to as "Diamond"). This venture will integrate specific non-product production assets from five Dow facilities (in Freeport, Texas City, and Seadrift, Texas, as well as in Plaquemine and St. Charles, Louisiana), including power and steam generation, pipelines, environmental operations, and general site infrastructure. The joint venture aims to provide infrastructure services to Dow and other industrial clients. Furthermore, its pipeline and storage assets will span the U.S. Gulf Coast, connecting with major natural gas, NGL, and olefins hubs.

Dow Chemical will remain the primary shareholder of Diamond, maintaining control over the joint venture to ensure operational continuity and safety. Macquarie Asset Management will have the right to increase its stake to 49% within six months after the transaction's completion. If this right is exercised, Dow could receive up to an additional $3 billion in cash proceeds.

Dow Chemical indicated that this transaction will help enhance the value of certain non-core assets and allow the company to focus more on developing its core chemical business. Previously, Dow had sold six North American rail infrastructure assets in September 2020 and its shipping and terminal operations in the U.S. Gulf Coast in December 2020.

Additionally, it is notable that on December 4, Dow announced the sale of its flexible packaging adhesive business within its packaging and specialty plastics segment to Arkema for $150 million.