BERLIN: Mercedes Benz said on Thursday (Feb 16) it plans to buy back up to €4 billion (RM18.87 billion) of its shares over two years from March 2023, in a move welcomed by analysts ahead of the carmaker reporting full-year earnings on Friday (Feb 17).
Shareholders Beijing Automotive Group and Geely had agreed to divest their shares on a pro-rata basis concurrently with the share buyback to keep their stakes in the company below 10%, the statement added.
The two Chinese companies are the largest single shareholders in Mercedes-Benz, together holding nearly 20% of the carmaker.
Under German financial regulation, shareholdings beyond a 10% threshold must be disclosed to regulators for scrutiny.
Analysts expected the company to announce a share buy back programme to coincide with the publication of Friday’s fourth-quarter report given the company’s high liquidity in automotive – estimated by BofA Global Research to be over €25 billion for 2022 – and strong free cash flow.
“We see this as a positive step showcasing an improved capital allocation strategy,” Daniel Roeska of Bernstein Research said in a note. – Reuters