American chemicals and materials manufacturer Dow entered into an agreement to sell rail infrastructure assets at six of its North American sites to transportation firm Watco Companies, the Midland, MI-based multinational announced in a release this week.
Under the terms of the deal, Dow will shed assets at its facilities in Plaquemine and St. Charles in Louisiana, Freeport and Seadrift in Texas, and Ft. Saskatchewan and Prentiss in Alberta. The company is slated to receive $310 million in cash proceeds during 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,” the firm’s chairman and chief executive officer, Jim Fitterling, said in a statement. “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.”
Watco is a provider of transportation, terminal and port, supply chain, and mechanical solutions in North America and Australia. The Pittsburg, KS-based company will also enter into an initial long-term agreement to provide services to Dow sites where the acquired assets are located.
14 employees of Dow will join Watco, along with the management of 400 contract workers, when the transaction closes.