PepsiCo announced today [Friday] that its Board of Directors has authorised the company to buy back up to US$5bn of common stock over the next three years.
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The new programme goes into effect immediately, and PepsiCo said it expects to begin buying back shares next week.
PepsiCo said the Securities and Exchange Commission agreed that the repurchases would not violate the terms of the pooling-of-interests accounting the company has used for its merger with The Quaker Oats Company. The merger was completed in August 2001.
“This share repurchase programme reflects our great confidence in PepsiCo’s ability to continue generating strong, consistent cash flow,” said Steve Reinemund, chairman of the board and chief executive officer. “The fundamental health and vitality of our businesses allows us to invest in growth opportunities, pay a dividend and buy back shares, all at the same time.”
The company said the repurchases may be effected through one or more trading plans that comply with current regulations.
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By GlobalDataPepsiCo cancelled an earlier share repurchase programme on 4 December, 2000 in order that its merger with Quaker would qualify for pooling-of-interests accounting. In September and October 2001 the company repurchased shares valued at approximately US$1.7bn under a temporary emergency relief order issued by the SEC when equity markets reopened after 11 September.
