Judge orders swift trial in Rohm-Dow merger

A Delaware judge today ordered a swift trial in Rohm & Haas Co.'s lawsuit seeking to force Dow Chemical Co. to close a $15.2 billion acquisition of the Philadelphia-based specialty-chemical firm.

Chancellor William B. Chandler 3d of Delaware's Chancery Court scheduled a March 9 trial, according to a court document. He denied a request by Dow Chemical for a two- or three-week delay, saying he was unconvinced that a delay would "meaningfully alter the informational base on which the court's decision will ultimately rest."

In a letter, Chandler encouraged Rohm & Haas and Dow to work out a solution on their own.

Rohm & Haas filed the lawsuit yesterday, saying Dow did not intend to close on the deal by 12:01 a.m. tomorrow, which was a deadline imposed by a merger agreement.

The merger was announced in July. The global recession, a weak chemical industry, and tight credit markets could lead to "an economic disaster for the combination," Dow chief executive officer Andrew Liveris said in an interview today with CNBC.

Liveris also said the economy must improve before Dow could complete the Rohm & Haas deal.

In addition, he said he might cut the company's dividend, a reversal from his position in early December.

"The world has changed in the last 30 to 45 days," Liveris said today. "The world is telling me that my dividend is too high."

Dow paid a dividend of 42 cents for the fourth quarter. The dividend yield, or the amount of the quarterly dividend paid divided by the share price, stood at 12.7 percent after yesterday's close. The higher the dividend yield, the more attractive a stock becomes. By comparison, DuPont Co.'s dividend yield stands at 7.1 percent, and Rohm & Haas' is 2.8 percent.

A reduction would be the first for the Midland, Mich., company since it began paying a dividend in 1912.

"It would be one of the things we would strongly look at," Liveris said.

Dow paid out about $1.5 billion in dividends in 2008.

But the recession has depressed the chemical industry's sales as consumers tighten their wallets and need fewer of the thousands of items made from chemicals, such as paint and shopping bags.