The chemical giant Dow announced Monday that it has agreed to sell a 40 percent stake in five non-producing infrastructure assets located throughout the Texas/Louisiana Gulf Coast to a fund managed by Australia’s Macquarie Asset Management.
Assets to be included in a newly-created partnership involve power and steam production, pipelines and general industrial site infrastructure in Freeport and Seadrift, in Texas and Plaquemine and St. Charles in Louisiana along with pipeline and storage assets adjacent to NGL and olefin hubs.
The resulting partnership will be known as Diamond Infrastructure Solutions and will focus on expansion of the tenant and client bases for the various assets.
The transaction includes a $2.4 billion cash payment for a 40 percent stake in the new company with an option for Macquarie to upsize their purchase before closing to as much as a 49 percent stake of Diamond for a total of $3 billion. Closing is expected within the first half of 2025.
Citi and Goldman Sachs are advising Dow on the transaction with Linklaters as outside legal counsel.
Sidley Austin is advising Macquarie on the deal with a team led from Houston by partners Tommer Yoked, Ashley Moulder, Chris Folmsbee, and Glenn L. Pinkerton, and with managing associate Jack G. Messer and Houston associates Kevin E. Hess, Nick J. Kalina, Elaina Johnson, Logan M. Kiefer, Ayo Adaranijo, Choa Song, Daniel F. Allison and Katy Yu.
The Sidley team also includes managing senior managing associate Joe Zenruffinen in New York along with partner Jeremy B. Pettit and senior managing associate Rebekah J. Maloney in Dallas, partner Terence T. Healey in Boston, managing associate Grace Dickson Gerbas, Houston associates Jordan I. Lee, Harvey Lou, Harris R. Dubin, Evan Grosch, and Jeff Kinney (all Energy and Infrastructure/ M&A); partner Rachel D. Kleinberg, in Palo Alto, senior managing associate Andrew B. Smith and associate Patrick M. Gray in New York (Tax); partner Heather M. Palmer in Houston (Environmental); partner Eric M. Winwood and counsel Marian Fielding in Dallas (Employee Benefits and Executive Compensation); partner Beatriz Azcuy, associates Connor T. Evans, Alison J. Wynne and Robert Piti Pertierra in Miami (Real Estate); partners Cathryn Le Regulski in Washington, D.C., partner Katherine A. Roberts in Los Angeles and associate Sara E Salmonson (Employment); partner Robert S. Velevis in Dallas and managing associate Ernesto R. Claeyssen in New York (Commercial Litigation and Disputes); counsel Scott J.F. Goldstein in Chicago (Insurance); counsel Ash Nagdev in Palo Alto (Privacy and Cybersecurity); and partner Patrick J. Harrison in London, counsel Edward W. Sharon in Washington, D.C. and associate Alex Harper in London (Antitrust and Competition).
For Dow the deal is a continuation of a efforts to steer away from the management of assets not considered core to the company’s production of industrial materials.
Said Jim Fitterling, chair and chief executive officer of Dow: “This transaction further strengthens our financial flexibility and enables continued cash deployment towards the most attractive opportunities that will create long-term value for our stakeholders. We are confident that Macquarie is the right industrially minded partner due to our shared values to ensure the ongoing safe and reliable operations of these assets to support Dow and industrial customers across the U.S. Gulf Coast.”