Dow sells U.S. Gulf marine and terminal assets to Vopak-BlackRock JV
Dow has entered into a definitive agreement to divest certain U.S. Gulf Coast marine and terminal operations and assets to Vopak Industrial Infrastructure Americas, a joint venture of Royal Vopak and BlackRock’s Global Energy & Power Infrastructure Fund, for USD620 million. The transaction, which was announced on September 14, 2020, includes marine and storage terminal operations and assets at Dow’s sites in Plaquemine and St. Charles, Louisiana, and Freeport, Texas.
“This unique expansion opportunity, in which we partner with the leading global investment experts of BlackRock, fits perfectly into Vopak’s growth strategy for industrial terminals,” said Eelco Hoekstra, chairman of the Executive Board and CEO of Royal Vopak.
The total capacity of the three terminals is 852,000 cubic meters (cbm). The Freeport, Texas, terminal has 53 tanks (140,000 cbm) for storage of chemicals. The St. Charles, Louisiana, terminal has 73 total tanks (409,000 cbm) for storage of chemicals. The Plaquemine, Louisiana, terminal has 30 tanks (303,000 cbm) for storage of chemicals and refined products. The involved assets include 16.4 hectares of expansion land, 36 vessel berths, multiple pipeline connections, rail and truck racks.
Royal Vopak is a leading global independent tank storage company with more than 400 years of expertise in independent storage and infrastructure services and a strategy designed to support growth opportunities.
“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,” said Jim Fitterling, chairman and chief executive officer of Dow. “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.”
In connection with this announcement, Dow and Vopak Industrial Infrastructure Americas have entered into long-term service agreements, ensuring reliable and cost-advantaged services for existing Dow businesses at the in-scope sites.
The transaction is expected to close in the fourth quarter of 2020, subject to customary regulatory approvals and other closing conditions in the United States and in the European Union. Normal operations will continue throughout the divestment process.
Goldman Sachs acted as financial advisor to Dow, and Mayer Brown provided legal support.
Dow continues to evaluate its ownership of non-revenue-generating assets across its global portfolio as announced on July 6, 2020, when the company announced a signed agreement to sell its rail infrastructure and assets at six North American sites. Also, as announced separately on July 23, 2020, the company is taking other actions to exit non-competitive assets.
Dow (NYSE: DOW) combines global breadth, asset integration and scale, focused innovation and leading business positions to achieve profitable growth. The company’s ambition is to become the most innovative, customer centric, inclusive and sustainable materials science company. Dow’s portfolio of plastics, industrial intermediates, coatings and silicones businesses delivers a broad range of differentiated science-based products and solutions for its customers in high-growth market segments, such as packaging, infrastructure and consumer care. Dow operates 109 manufacturing sites in 31 countries and employs approximately 36,500 people. Dow delivered sales of approximately USD43 billion in 2019. For more information, visit www.dow.com.
Royal Vopak is the world’s leading independent tank storage company, with more than 400 years of history and a focus on sustainability. Vopak is determined to develop key infrastructure solutions for the world’s changing energy systems, while simultaneously investing in digitalization and innovation. Vopak is listed on the Euronext Amsterdam and is headquartered in Rotterdam, the Netherlands. For more information, visit www.vopak.com.
BlackRock’s purpose is to help more and more people experience financial well-being. As of June 30, 2020, the firm managed approximately USD7.32 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, visit www.blackrock.com.