By Michael Erman and Matt Daily
NEW YORK (Reuters) - Dow Chemical Co
Dow said it will cut the dividend to 15 cents a share on April 30 from its previous level of 42 cents.
Earlier this month, Midland, Michigan-based Dow posted a fourth-quarter loss of $1.55 billion as the spreading economic crisis took a toll on demand from key markets such as the construction, electronics and automotive industries.
The company has moved to cut 5,000 jobs, sell off some businesses and pare back capital spending.
Dow has been embroiled in a court battle with Rohm and Haas over the acquisition of more than $15 billion.
The company refused to close the takeover after a key joint venture with Kuwaiti investors fell apart. Dow had intended to use proceeds from the transaction -- a $17.4 billion plastics joint venture -- to help fund the Rohm deal.
According to Dow, completing the Rohm and Haas deal now would jeopardize both companies.
Cutting the dividend will save Dow about $1 billion on an annual basis, a figure one analyst said would not be enough for it to go forward with the Rohm purchase at the current price.
"This is not going to make it materially easier for Dow to consummate the transaction as it currently stands," said BB&T
analyst Frank Mitsch.
Dow Chief Executive Andrew Liveris initially suggested the company's dividend was safe, but reversed course on January 27 after economic conditions worsened and Rohm filed suit.
Rohm and Haas has suggested Dow cut its dividend to 1 cent a share to help finance the deal.
Earlier on Thursday, a Delaware judge denied a move by Dow to disqualify Rohm's lawyers from the trial scheduled to begin on March 9. Dow had argued it previously used the same law firm in a dispute with two former executives who had tried to put Dow up for sale.
Dow shares closed unchanged at $10.04 per share on the New York Stock Exchange after declining as much as 4.6 percent during the day. The Standard & Poor's chemicals index <.GSPPM> closed up 0.7 percent.
(Reporting by Michael Erman and Matt Daily, editing by Leslie Gevirtz and Jeffrey Benkoe)
