Global Processing

Dow Chemical makes first dividend cut in 97 years

February 16, 2009

Dow Chemical announced its first quarterly dividend cut in 97 years, citing the economic downturn and a pair of deals that turned sour late last year. The Associated Press reports that the company cut its dividend from 42 cents to 15 cents. Though it is the company''s first reduction since 1912, it will still be the 390th consecutive cash dividend issued. Dow postponed its $15.4 billion buyout of specialty chemical maker Rohm & Haas just weeks after a planned joint venture with a Kuwaiti company collapsed. Dow had expected to pocket $7 billion from the Kuwaiti deal, money that could have helped fund the Rohm & Haas acquisition. Dow had agreed to pay $78 per share for Rohm & Haas, a price some on Wall Street consider too high given the current economic climate, especially after the Kuwait venture collapsed. Dow is now paying a $3 million "ticking fee" for every day it does not close the Rohm & Hass deal. Philadelphia-based Rohm & Haas has sued Dow and the case is scheduled to go to court in Delaware next month.