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 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, BlackRock, 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 on the divestiture the sources said.
Morgan Stanley declined to comment.
By Arno Schuetze
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?