Stellantis, the automotive behemoth formed through the merger of Fiat Chrysler Automobiles and Peugeot S.A., has unveiled the primary tranche of its share buyback program. The initiative was initially disclosed in the company’s January 2021 prospectus and is the brainchild of Stellantis CEO Carlos Tavares.
The share repurchase program entails the purchase of €2 billion (approximately $2.4 billion) worth of Stellantis stock over the course of 24 months. The first tranche of this program, which began on April 6th, 2021, entails the repurchase of approximately €1 billion (approximately $1.2 billion) worth of shares.
Tavares, who assumed his role as Stellantis CEO in January 2021, has long been an advocate of capital returns to shareholders. Under his leadership, Peugeot S.A. implemented several share buyback and dividend programs, including a €2 billion share buyback in October 2020.
The current program is designed to bolster investor confidence in Stellantis, which was formed through the merger of two of the European automotive industry’s largest players. While the merger is expected to yield significant operational and financial benefits, investor sentiment has been lukewarm, reflected in the company’s lackluster stock performance since the merger was announced in December 2020.
The Stellantis board of directors, in conjunction with Tavares, hopes that the current share buyback program will help to restore investor confidence and bolster the company’s stock price.
In a statement, Tavares noted that “The launch of this share buyback program is an important step in our commitment to delivering value to our shareholders and is a demonstration of our confidence in the future of Stellantis.”
This initiative marks the first major capital return program implemented by Stellantis since its formation and is one of several steps the company is taking to enhance shareholder value. The board of directors is also in the process of evaluating the potential for future share buybacks and dividend payments.
Stellantis’ share buyback program is a further testament to the company’s ongoing commitment to return value to its shareholders.