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(Releads, adds Magnesita targets, dividend)
VIENNA, May 11 (Reuters) - Fireproof industrial materials maker RHI, which is taking over Brazilian rival Magnesita, said it plans to keep the dividend payout at around $33 million in 2017 and 2018, cutting the amount per share for the enlarged group.
The Austrian company, which has agreed to pay 450 million euros ($489 million) for Magnesita and hopes to close the deal by November, is paying out 0.75 euros in dividend for 2016 for each of its around 40 million shares.
The number of shares will increase to up to 50 million shares after the Magnesita takeover, an RHI spokesman said on Thursday.
"For the combined entity, we plan to keep the dividend payout stable at 30 million euros in 2017 and 2018," the spokesman said.
RHI plans to lift the payout once the combined company manages to generate stronger cash flow, it said in its first-quarter report.
The group aims to achieve this by savings through the combination of the two businesses, debt reduction and organic growth.
RHI shares gained 2 percent to 29.15 euros by 0915 GMT.
The Austrian company also adjusted its mid-term forecast for the new entity, RHI Magnesita. It now expects organic revenue of the combined group to increase "in line with the volume growth in its customers' industries".
In October, it said it aimed to achieve consolidated annual sales of up to 2.8 billion euros and an operating EBIT margin of more than 12 percent by 2020.
RHI now aims for the margin target to be reached after 70 million euros of synergies have been achieved.
Both companies supply the steel, cement and glass industry with fireproof refractory materials. RHI derives 40 percent of its sales from slow-growing developed economies such as Western Europe, and Magnesita being focused on North and South America.
RHI said it filed for merger control clearance with the competition authorities in Brazil at the end of March and in Europe at the beginning of May.
It expects to have a clearer picture of the outcome of the proceedings at the end of the first half of 2017. ($1 = 0.9196 euros) (Reporting by Kirsti Knolle; Editing by Sunil Nair)