Dow Chemical Co (DOW.N), the No. 1 U.S. chemical maker by sales, increased its dividend and said it would buy back shares worth $5 billion, more than doubling its share repurchase program.

Dow and rival Dupont (DD.N) are facing investor pressure to raise shareholder returns by divesting businesses that are exposed to swings in prices of commodities.

Dow, which is being pushed by hedge fund manager Daniel Loeb to split up, said it would complete its previous $4.5 billion share repurchase program by the end of the year.

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

The company also boosted its quarterly dividend to 42 cents per share from 37 cents.

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

Dow has narrowed its focus to packaging, electronics and agriculture and is looking to raise as much as $6 billion from asset sales.

The company also plans to cut fixed costs by $1 billion over the next three years.

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

Dow Chemical's shares were up 1 percent at $50 before the bell. Up to Tuesday's close, the stock had risen nearly 25 percent over the past year.