Dow has signed an agreement to sell part of the US Gulf Coast marine and terminal operations and assets to Vopak Industrial Infrastructure Americas for $620m.
Vopak Industrial Infrastructure Americas is a joint venture (JV) of Royal Vopak and BlackRock’s Global Energy & Power Infrastructure Fund.
The marine and storage terminal operations and assets at Dow’s Plaquemine and St Charles sites in Louisiana and Freeport site in Texas are included in the transaction.
Dow CEO and chairman Jim Fitterling said: “Today’s announcement is another demonstration of our ongoing commitment to applying a best-owner mindset, supported by rigorous benchmarking and a focus on disciplined capital allocation.
“The transaction will enable Dow to deploy cash towards value-enhancing opportunities in our core businesses consistent with our capital allocation priorities, including ensuring safe and reliable operations and paying down additional debt.
“Dow is also pleased to further our longstanding relationship with Vopak who is already a key logistics partner at several Dow locations globally.”
Dow and Vopak Industrial Infrastructure Americas have also signed long-term service agreements, which are expected to ensure cost-advantaged services for existing Dow businesses at the in-scope sites.
The deal is subject to customary regulatory approvals and other closing conditions in the US and the EU and is expected to take place in the fourth quarter of this year.
The deal is part of Dow’s plans to evaluate its ownership of non-revenue-generating assets. The company is also planning to take other actions to depart from non-competitive assets.
Throughout the divestment process, normal operations are set to continue.