I D
× COMMENTARYIN THE NEWSNEWSFRONTSCHEMENTATOR + Show More
Chemical EngineeringChemenator Briefs
Ethylene Toyo Engineering Corp. (Chiba, Japan; www.toyo-eng.com) has been awarded…
BUSINESS NEWSTECHNICAL & PRACTICALFEATURE REPORTFACTS AT YOUR FINGERTIPSTECHNOLOGY PROFILEEQUIPMENT & SERVICESFOCUSNEW PRODUCTS + Show More

Comment

Dow to divest U.S. rail infrastructure assets

By Mary Page Bailey |

Dow Inc. (Midland, Mich.) announced that it has signed a definitive agreement to sell its rail infrastructure assets and related equipment at six major North American sites to Watco Companies (Watco), a Pittsburg, Kansas-based transportation company providing transportation, terminal and port, supply chain, and mechanical solutions for customers throughout North America and Australia. Dow expects to receive cash proceeds in excess of $310 million as part of the transaction. The assets are located at Dow’s sites in Plaquemine and St. Charles, Louisiana; Freeport and Seadrift, Texas; and Ft. Saskatchewan and Prentiss in Alberta, Canada.

“Today’s announcement is part of an on-going review of our ownership of non-product producing assets and is driven by our commitment to apply a best-owner mindset to everything we do,” said Jim Fitterling, chairman and chief executive officer of Dow. “It aligns to Dow’s strategy to continue to grow our core businesses in a capital-efficient manner. The transaction will liberate cash from our balance sheet that we will use to pay down debt and invest in our core value-generating businesses.”

Dow and Watco will enter into initial long-term service agreements, providing reliable and cost-advantaged services for existing Dow businesses at the sites where the assets reside. Dow expects Watco’s significant rail expertise and capabilities will deliver additional operational efficiencies and opportunities for growth over time.

Dow and Watco are working closely to ensure a seamless transition. The transaction is expected to close in the fourth quarter of 2020, subject to customary closing conditions.

Fourteen Dow employees and management of approximately 400 contract workers are expected to transition to Watco upon close of the transaction.

Dow continues to evaluate its ownership of non-product producing assets across its global portfolio. The Company expects this effort to generate additional opportunities from its infrastructure footprint consistent with those in today’s announcement.

Goldman Sachs acted as financial advisor to Dow, and Mayer Brown & Thompson Hine provided legal support.

Related Content

Chemical Engineering publishes FREE eletters that bring our original content to our readers in an easily accessible email format about once a week.
Subscribe Now
Steel Belt Units for Medical Membranes
Upstream Oil & Gas: Automation intelligence from wellhead to distribution
Video - CoriolisMaster
Video - Do you really need a thermowell?
The influence of IIoT in the dewatering process step of pigment production

View More