Economy

Nestle to buy back $21 billion in its own stock by 2020

Nestle to buy back $21 billion in its own stock by 2020”

Nestle says Monday, June 26, 2017 it's keeping "an open dialogue with all of our shareholders" after news reports that a USA hedge fund has taken a large stake sent shares of the Swiss food and beverages giant soaring. The food maker hasn't had a repurchase program since 2014, and Schneider said in February in his first public appearance as CEO that buying back stock is a lower priority than reinvesting in Nestle's business and paying dividends.

In response Nestlé has announced that it will launch a huge share buyback and focus its capital spending on high-growth categories including coffee, pet care, infant nutrition as well as consumer healthcare. The buyback announcement follows the initiation of a review of the company's capital structure and priorities to support its "value creation model", which includes the recent announcement that it was exploring alternatives for its USA confectionery business.

The New York-based hedge fund, controlled by billionaire investor Daniel Loeb, disclosed a $3.5 billion stake in the company on Sunday and is pushing for Nestle to more aggressively boost performance.

In a statement, Nestlé said that the share buyback program of up to CHF 20 billion (roughly $21 billion) would be completed by the end of June 2020.



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