- Transaction driven by best-owner mindset and focus on investing
for growth in core businesses
- Watco Companies selected as new rail operations partner,
bringing industry-leading rail experience and capabilities, as well
as opportunities for growth investments
Dow Inc. (NYSE: DOW) today announced that it has signed a
definitive agreement to sell its rail infrastructure assets and
related equipment at six major North American sites to Watco
Companies (Watco), a Pittsburg, Kansas-based transportation company
providing transportation, terminal and port, supply chain, and
mechanical solutions for customers throughout North America and
Australia. Dow expects to receive cash proceeds in excess of $310
million as part of the transaction. The assets are located at Dow’s
sites in Plaquemine and St. Charles, Louisiana; Freeport and
Seadrift, Texas; and Ft. Saskatchewan and Prentiss in Alberta,
Canada.
“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,” said
Jim Fitterling, chairman and chief executive officer of Dow. “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.”
Dow and Watco will enter into initial long-term service
agreements, providing reliable and cost-advantaged services for
existing Dow businesses at the sites where the assets reside. Dow
expects Watco’s significant rail expertise and capabilities will
deliver additional operational efficiencies and opportunities for
growth over time.
Dow and Watco are working closely to ensure a seamless
transition. The transaction is expected to close in the fourth
quarter of 2020, subject to customary closing conditions.
Fourteen Dow employees and management of approximately 400
contract workers are expected to transition to Watco upon close of
the transaction.
Dow continues to evaluate its ownership of non-product producing
assets across its global portfolio. The Company expects this effort
to generate additional opportunities from its infrastructure
footprint consistent with those in today’s announcement.
Goldman Sachs acted as financial advisor to Dow, and Mayer Brown
& Thompson Hine provided legal support.
About Dow
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 $43 billion in 2019. References to
Dow or the Company mean Dow Inc. and its subsidiaries. For more
information, please visit www.dow.com or follow @DowNewsroom on
Twitter.
Cautionary Statement about Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance, financial condition, and other matters,
and often contain words such as “believe,” “expect,” “anticipate,”
“project,” “estimate,” “intend,” “may,” “opportunity,” “outlook,”
“plan,” “seek,” “should,” “strategy,” “will,” “will be,” “will
continue,” “will likely result,” “would,” “target” and similar
expressions, and variations or negatives of these words.
Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may
cause actual results to differ materially from the forward-looking
statements.
Forward-looking statements include, but are not limited to,
expectations as to future sales of Dow’s products; the ability to
protect Dow’s intellectual property in the United States and
abroad; estimates regarding Dow’s capital requirements and need for
and availability of financing; estimates of Dow’s expenses, future
revenues and profitability; estimates of the size of the markets
for Dow’s products and services and Dow’s ability to compete in
such markets; expectations related to the rate and degree of market
acceptance of Dow’s products; the outcome of certain Dow
contingencies, such as litigation and environmental matters;
estimates of the success of competing technologies that may become
available and expectations regarding the benefits and costs
associated with each of the foregoing.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. Forward-looking statements
are based on certain assumptions and expectations of future events
which may not be realized and speak only as of the date the
statements were made. In addition, forward-looking statements also
involve risks, uncertainties and other factors that are beyond
Dow’s control that could cause Dow’s actual results to differ
materially from those projected, anticipated or implied in the
forward-looking statements. These factors include, but are not
limited to: fluctuations in energy and raw material prices; failure
to develop and market new products and optimally manage product
life cycles; significant litigation and environmental matters;
failure to appropriately manage process safety and product
stewardship issues; changes in laws and regulations or political
conditions; global economic and capital markets conditions, such as
inflation, market uncertainty, interest and currency exchange
rates, and equity and commodity prices; business or supply
disruptions; security threats, such as acts of sabotage, terrorism
or war, weather events and natural disasters; ability to protect,
defend and enforce Dow’s intellectual property rights; increased
competition; changes in relationships with Dow’s significant
customers and suppliers; unanticipated expenses such as litigation
or legal settlement expenses; unanticipated business disruptions;
Dow’s ability to predict, identify and interpret changes in
consumer preferences and demand; Dow’s ability to complete proposed
divestitures or acquisitions; Dow’s ability to realize the expected
benefits of acquisitions if they are completed; the availability of
financing to Dow in the future and the terms and conditions of such
financing; and disruptions in Dow’s information technology networks
and systems. Additionally, there may be other risks and
uncertainties that Dow is unable to identify at this time or that
Dow does not currently expect to have a material impact on its
business.
Risks related to achieving the anticipated benefits of our
separation from DowDuPont Inc. include, but are not limited to, a
number of conditions including risks outside the control of Dow
including risks related to (i) our inability to achieve some or all
of the benefits that we expect to receive from the separations,
(ii) certain tax risks associated with the separations and
distributions, (iii) our inability to make necessary changes to
operate as a stand-alone company following the separations and
distributions, (iv) the failure of our pro forma financial
information to be a reliable indicator of our future results, (v)
our inability to enjoy the same benefits of diversity, leverage and
market reputation that we enjoyed as a combined company, (vi)
restrictions under the intellectual property cross-license
agreements, (vii) our inability to receive third-party consents
required under the separation agreement, (viii) our customers,
suppliers and others' perception of our financial stability on a
stand-alone basis, (ix) non-compete restrictions under the
separation agreement, (x) receipt of less favorable terms in the
commercial agreements we will enter into with DuPont and Corteva
than we would have received from an unaffiliated third party and
(xi) our indemnification of DuPont and/or Corteva for certain
liabilities.
Where, in any forward-looking statement, an expectation or
belief as to future results or events is expressed, such
expectation or belief is based on the current plans and
expectations of management and expressed in good faith and believed
to have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished.
For a more detailed discussion of Dow’s risks and uncertainties,
see the “Risk Factors” contained in Dow’s registration statement on
Form 10, as amended, filed with the Securities and Exchange
Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200706005116/en/
Rachelle Schikorra +1 989.638.4090
RYSchikorra@dow.com
Dow (NYSE:DOW)
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