BERLIN (Reuters) -Mercedes Benz said on Thursday it plans to buy back up to 4 billion euros ($4.28 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.
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 euros 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.
($1 = 0.9354 euros)
(Reporting by Riham Alkousaa, Victoria Waldersee; Editing by Susan Fenton and Alistair Bell)
Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.