Nestlé, which owns iconic chocolate brands such as KitKat, has announced it has completed its CHF 20bn share buyback program initiated on 4 July, 2017. Since that date, Nestlé has repurchased 225,186,059 of its shares for a total of CHF 20bn ($20.7B) at an average purchase price per share of CHF 88.82.
Share buybacks are often seen as a sign that a company believes its stock is undervalued, and as an efficient way to returning money to shareholders.
But, according to Yahoo Finance, they can also be seen as a sign that the management does not see many profitable ways of helping the company grow further.
Money to repurchase the Nestle shares has come from sales of brands it no longer believes are essential to its core business, like its US candy business that it sold to Ferrero in 2018.
In its statement, Nestlé said: ‘The volume of monthly share buybacks will depend on market conditions. Should any extraordinary dividend payments or sizeable acquisitions take place during this period, the amount of the share buyback will be reduced accordingly.'