Mercedes-Benz Group AG plans to buy back up to €1 billion ($1.2 billion) of its own shares, continuing its capital return program to shareholders amid declining sales in China. This was reported by Bloomberg.
The supervisory board of the German automaker has approved the program, which will conclude on April 6. This move officially confirms the company's plans announced back in July when the second-quarter results were published.
The repurchased shares will be canceled. Mercedes is trying to balance shareholder payments with investments in electric vehicles and software amid rising competition, especially in China. Bloomberg reports that earlier this year the company completed a separate €2 billion share buyback program.
The company's automotive division recorded a 4% adjusted operating margin in the second quarter, which, as Bloomberg notes, is significantly below Mercedes' target figures. The company is cutting costs and production capacity while the CEO is pushing for a major refresh of the model lineup, including the new CLA sedan and the electric GLC SUV.
According to the article, the share buyback will be conducted through an independent bank and may be temporarily suspended during separate employee stock purchase programs scheduled for November and March.
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