In its best-known TV commercial,

H.J. Heinz

(HNZ)

suggested that its slow-moving ketchup is worth the wait.

But following a deal announced Thursday, which will make Heinz a smaller company, it's the company's dividends that may keep investors straddling anticipation and frustration.

The company said it's spinning off some of its businesses, including 9-Lives pet food, StarKist tuna and Nature's Goodness baby food, and merging them with

Del Monte

(DLM)

. The deal calls for Del Monte to assume more than $1 billion of Heinz debt.

Heinz shareholders can anticipate a one-third cut in their annual dividend, to $1.08 a share, beginning April 2003 to reflect the smaller company. Heinz shareholders also will receive about 0.45 shares of new Del Monte company common stock for every one share of Heinz common stock they hold. Those shares are valued at about $1.85 billion at Thursday's closing price.

Heinz's stock fell about 4.9% on Thursday to $39.55. Del Monte was up 8.37% to $11.65.

"Heinz will become a faster-growing, more focused, international food company, targeting consistent earnings per share increases of 8-10% per year and targeting 3-4% increases in annual sales following this transition year," said William R. Johnson, chairman, president and CEO of Heinz, in a statement. The new merged business will operate under the Del Monte name.

Heinz also reported Thursday that for its fourth quarter ending May 1, net income was $219.4 million, or 62 cents a share. That's an increase of 18.2% from $185.7 million, or 53 cents, in the year-earlier quarter. Including special items, Heinz posted net income of $223.5 million, or 63 cents a share, compared with a loss of $170.5 million, or 49 cents a share.

Also on Wednesday, Moody's confirmed its rating of Heinz and changed its outlook to stable from negative, but some Heinz analysts said the deal tasted sour.

"As we wrote in our earnings preview, we said that any change in portfolio structure will give Heinz management the excuse to cut the dividend, and this is exactly what's happening," said Jaine Mehring, an analyst with Salomon Smith Barney.