Dow sells North American rail assets Watco

Dow sells North American rail assets to Watco

7:15 AM, 7th July 2020
Dow Inc headquarters' in Midland, Michigan, US. (File Photo)

MIDLAND, US: Dow Inc announced 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 & port, supply chain, and mechanical solutions for customers throughout North America & Australia.Dow expects to receive cash proceeds in excess of $310 million as part of the transaction and the transaction is expected to close in the fourth quarter of 2020.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.

Further, Dow and Watco will enter into initial long-term service agreements, providing services for existing Dow businesses at the sites where the assets reside.Fourteen Dow employees and management of approximately 400 contract workers are expected to transition to Watco upon close of the transaction.“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.”Goldman Sachs acted as financial advisor to Dow and Mayer Brown & Thompson Hine provided legal support.

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