Nestle Plans $20.8 Billion Share Buyback Over the Next 3 Years
June 27 2017 - 1:12PM
Dow Jones News
By Brian Blackstone
ZURICH -- Nestlé SA said Tuesday it will buy back up to CHF20
billion ($20.8 billion) of its shares through June 2020 and focus
its investment spending on coffee, bottled water and other
high-growth segments as the consumer giant faces intense investor
pressure to deliver faster returns.
After an internal review by the company's board, "Nestlé
determined that capital spending will be focused particularly on
advancing high-growth food and beverage categories such as coffee,
pet care, infant nutrition and bottled water, as well as expanding
its presence in high-growth geographic markets," the company
said.
It also said it would pursue opportunities in consumer health
care.
Nestlé said its share buybacks will start July 4, 2017.
"The volume of monthly share buybacks will depend on market
conditions, but is likely to be backloaded in 2019 and 2020 to
allow the pursuit of value-creating acquisition opportunities," it
said.
Tuesday's announcement came two days after activist investor
Daniel Loeb's Third Point hedge fund disclosed a $3.5 billion stake
in Nestlé -- or about 1.25% of Nestlé shares -- and demanded a
series of changes to boost shareholder returns. These included a
formal margin target, more share buybacks and a sale of Nestlé's
stake in French cosmetics firm L'Oréal.
Write to Brian Blackstone at brian.blackstone@wsj.com
(END) Dow Jones Newswires
June 27, 2017 12:57 ET (16:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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