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.

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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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