14 April 2011 23:35 [Source: ICIS news]
(releads, adds paragraphs 6, 8-12)
HOUSTON (ICIS)--US-based Dow Chemical increased its dividend by 67%, the company said on Thursday, illustrating how it and the chemical industry has recovered from a series of crises in 2009.
The increase will bring the dividend to 25 cents/share, up from 15 cents/share, where it had been since 2009.
Back then, Dow was struggling with uncertain credit markets, unprecedented lower demand for chemical products, the global recession and what it called "pending business issues" at the time.
Specifically, Dow was intent on preserving its investment-grade rating.
Meanwhile, the company had just reached a settlement to acquire Rohm and Haas for $78/share.
The Rohm and Haas deal, in turn, was threatened by a cash shortfall, caused by the collapse of Dow's joint venture with petrochemical Industries Co (PIC) of Kuwait. Dow would have received $9bn (€6bn) from the deal.
Before the February 2009 decrease, Dow's dividend was 42 cents/share.
Dow was not the only chemical company contending with the fallout from the economic downturn, which caused credit markets to freeze and demand to collapse.
That month, Dow's shares fell to a 24-year low - hitting $6.47/share, while stocks for several other chemical companies were trading below $20/share. The Dow Jones Industrial Average was at 6,594.44.
Since then, Chemtura, LyondellBasell and Tronox have all emerged from bankruptcy protection. Chemtura and LyondellBasell, in fact, are listed on the New York Stock Exchange.
Dow Chemical's stock closed on Thursday at $36.93.
Dow's new dividend will be payable on 29 July to shareholders of record on 30 June.
"This dividend increase clearly illustrates our board's commitment to increasingly reward our shareholders as we continue to grow earnings," chief executive Andrew Liveris said in a statement.
"The growth potential of our transformed enterprise was on full display in 2010," he said.
"Our enhanced financial flexibility and robust portfolio of businesses make us well positioned to deliver sustainable growth, and today's announcement further demonstrates Dow's commitment to continue to enhance value for our shareholders, and to pursue a dividend policy that is reflective of a growth company long term," Liveris said.
($1 = €0.69)
For more on Dow visit ICIS company intelligence
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections