Deal is part of Dow's review of non-product producing assets
Dow to continue using assets in long-term deal with Watco
Petrotahlil — Dow Chemical has agreed to sell its rail infrastructure assets and related equipment at six North American petrochemical complexes and enter long-term service agreements with the buyer, the US-based producer said July 6.
Kansas-based Watco Companies, a transportation and supply logistics company, will buy the assets in the $310 million deal. While Dow is shedding the assets, the company will continue to use them with Watco as the owner and operator.
Dow CEO Jim Fitterling said in a statement that the deal is part of a review of Dow's "non-product producing assets" in an effort to grow core businesses while freeing up cash to pay down debt.
The deal is expected to close in the fourth quarter of 2020.
Such rail infrastructure is common at petrochemical complexes to load resins and chemicals onto rail cars for transport to customers, warehouses for packaging and ports for export.
The sites where such infrastructure is part of the deal with Watco are in Plaquemine and St. Charles, Louisiana; Freeport and Seadrift, Texas; and Fort Saskatchewan and Prentiss in Alberta, Canada.
All the sites produce grades of polyethylene, which is used to make the world's most-used plastics, including grocery bags, milk jugs, detergent bottles and food and beverage packaging.
"Dow continues to evaluate its ownership of non-product producing assets across its global portfolio," Dow said. "The company expects this effort to generate additional opportunities from its infrastructure footprint consistent with those in today's announcement."