Diageo to release next ‘tranche’ of its share buy back
By Jenny McCall
07:58, 26 November 2021
The London-headquartered multinational beverage alcohol company Diageo announced on Friday that it would release the next quota of its return of capital programme (ROC), which meant giving up to £4.5bn ($6bn) to shareholders by 30 June 2024.
Diageo, which owns liquor brands such as Johnnie Walker, Smirnoff, Cîroc, Ketel One vodkas, Captain Morgan Rum and Baileys Liqueur, said the first phase of the ROC programme got completed on 31 January 2020, which saw Diageo repurchase shares to the value of £1.25 billion.
On 12 May 2021, the second stage of Diageo’s programme was launched of up to £1.0 billion, to be completed by the end of the financial year 2021-22. Under the first tranche of the second phase, completed on 12 November 2021, Diageo repurchased shares to a value of £0.45 billion.
“Diageo is announcing today that it has entered into a non-discretionary agreement with Goldman Sachs International (GSI) to enable the company to buy back shares with a value of up to £0.55 billion,” the statement said.
“The purpose of the repurchases is to reduce the share capital of Diageo and all shares repurchased under this agreement will be cancelled.”
The share buyback tranche of up to £0.55 billion will take place within the limitations of Diageo’s existing general authority to repurchase up to 233,611,282 shares, which was granted at its 2021 annual general meeting.
Diageo share price was down in early morning trade today by 2.56% at £38.14.
Read more: Diageo reports strong results but warns of Covid challenges