Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dow Inc seeks buyers for German chemical parks infrastructure: sources

Published 02/18/2021, 11:54 AM
Updated 02/18/2021, 11:55 AM
© Reuters. A Dow sign is seen at the third China International Import Expo (CIIE) in Shanghai

© Reuters. A Dow sign is seen at the third China International Import Expo (CIIE) in Shanghai

By Arno Schuetze

FRANKFURT (Reuters) - U.S. chemicals maker Dow Inc has put German infrastructure assets up for sale in a potential 800 million euro ($966 million) deal as it seeks cash for investment elsewhere, sources close to the matter told Reuters.

Chief Executive James Fitterling last month said that Dow would continue to offload infrastructure companies from its balance sheet and make use of the funds for capex, smaller acquisitions or share buybacks.

While Dow would sell the infrastructure at petrochemicals sites in Stade, Schkopau und Boehlen, it would continue to produce plastics and intermediates there, paying usage fees to the new owner. Dow is the main user but not the only one operating in the three chemical parks.

Chemical parks typically provide infrastructure for the likes of electricity, steam, natural gas and other services to resident producers.

"Dow has informed employees in Germany that it is exploring opportunities related to certain site infrastructure assets and services at its Stade, Schkopau and Boehlen sites, but no final decision has been made", a company spokesman said.

In a similar deal in 2019, Bayer (OTC:BAYRY) and Lanxess sold integrated chemical site operator Currenta to Macquarie in a 3.5 billion euro deal.

Dow has sent out information packages to prospective bidders including KKR, Blackstone (NYSE:BX), BlackRock (NYSE:BLK), Brookfield Asset Management, Macquarie, First Sentier and DIF Capital Partners, the sources said.

The business is being marketed with an annual sales figure of 300 million euros with core profit of about 65 million euros.

Bidders could value the infrastructure assets at about 12-13 times core earnings, the sources added.

Dow is working with Morgan Stanley (NYSE:MS) on the divestiture the sources said.

Morgan Stanley declined to comment.

© Reuters. A Dow sign is seen at the third China International Import Expo (CIIE) in Shanghai

($1 = 0.8284 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.