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Dow chemical raises buyback by $5 billion

Dow Chemical Co. raised its asset sale target by as much as 42 percent to $8.5 billion and increased its share buyback plan by $5 billion, as it looks to thwart hedge fund manager Daniel Loeb's push to split the company.

Dow Chemical Co. raised its asset sale target by as much as 42 percent to $8.5 billion and increased its share buyback plan by $5 billion, as it looks to thwart hedge fund manager Daniel Loeb's push to split the company.

The increased buyback plan brings Dow's total share repurchase program to $9.5 billion.

Shares of Dow Chemical, which also raised its quarterly dividend to 42 cents per share from 37 cents, rose as much as 3 percent on the New York Stock Exchange on Nov. 12.

Dow and rival Dupont are facing pressure from investors to raise shareholder returns by divesting businesses that are exposed to swings in commodity prices.

Dow, the No. 1 U.S. chemical maker by sales, says it now expects to raise $7 billion to $8.5 billion from divestitures by mid-2016. The company says it is on track to meet its earlier asset sale target of $4.5 billion to $6 billion by the end of 2015.

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The company says it will sell Angus Chemical Co. to Golden Gate Capital for $1.22 billion and expects the deal to close during the first quarter of 2015.

Dow has also put specialty chemical unit AgroFresh Inc. and its sodium borohydride business on the block. It has also earmarked its epoxy business and some chlorine and derivatives assets for sale.

The company also says it plans to cut stakes in all of its Kuwait joint ventures to releasing money for "other strategic purposes, including shareholder remuneration."

Dow, which has narrowed its focus to packaging, electronics and agriculture, also reorganized its reporting units into five divisions from six. The company says the new structure would help it extract maximum value from its integrated structure.

Loeb has asked Dow to separate its commoditized raw material units from specialty chemicals businesses, but the company says keeping its units together helps lower costs.

Dow, which has been paying cash dividends every quarter since 1912, says the new dividend would be payable on Jan. 30 to shareholders on record as of Dec. 31.

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