MIDLAND, Mich.—Dow Inc. is selling its rail infrastructure assets and related equipment at six North American sites in a deal worth more than $310 million.
The buyer is Watco Cos., a Pittsburg, Kan.-based firm that provides transportation, terminal and port, supply chain and mechanical solutions for customers throughout North America and Australia.
The assets being sold are at Dow sites in Plaquemine and St. Charles, La.; Freeport and Seadrift, Texas; and Fort Saskatchewan and Prentiss in Alberta. In a July 6 news release, officials with Midland-based Dow said that the plastics and chemicals giant "expects to receive cash proceeds in excess of $310 million" as part of the transaction.
Chairman and CEO Jim Fitterling said in the release that the sale "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."
He added that 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 Dow businesses at those sites. Officials said that Dow expects Watco's rail expertise and capabilities "will deliver operational efficiencies and opportunities for growth over time."
The transaction is expected to close in the fourth quarter. Fourteen Dow employees and management of around 400 contract workers are expected to transition to Watco.
Officials said that Dow "continues to evaluate its ownership of non-product producing assets across its global portfolio."
Dow employs 36,500 worldwide and posted sales of around $43 billion in 2019.