Mercedes to start 1 billion euro share buyback programme
The move formalises plans it had already flagged with its second-quarter results in July
Mercedes-Benz has announced a share buyback programme worth up to 1 billion euros ($1.2 billion) starting from September 1, 2021, and concluding by April 6, 2022. This move extends the company's capital-return programme even as it faces declining sales in China. The supervisory board of the German carmaker approved the plan, which involves repurchasing and subsequently cancelling the shares.
The company had previously announced a similar buyback of 2 billion euros earlier in the year. Mercedes is striving to strike a balance between returning value to shareholders and investing in electric vehicles and software as competition intensifies, especially in China. The company's cars division reported an adjusted return on sales of 4% in the second quarter, falling short of its goals.
Mercedes is focusing on cost cuts, workforce reduction, and product launches, including the new CLA sedan and electric GLC SUV. The share buyback will be conducted through an independent bank, and may be paused during subsequent employee share purchase programs scheduled for November and March, according to Mercedes.
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