Stellantis Approves Share Buyback Program
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Insights
The approval of a €3 billion share buyback program by Stellantis signifies a strategic capital allocation decision that can influence shareholder value. Share buybacks are often implemented when a company believes its shares are undervalued or when it seeks to improve financial metrics such as earnings per share (EPS) by reducing the number of outstanding shares. In this case, the buyback also includes an employee incentive component, which can be a tool to align the interests of employees with those of shareholders and can potentially enhance employee retention and motivation.
From an investment standpoint, the buyback announcement may be interpreted positively by the market as it signals confidence in the company's financial health and future prospects. However, investors should also consider the opportunity cost of such a program, as the capital used for buybacks could alternatively be invested in growth opportunities or used to pay down debt. The long-term impact of this decision will largely depend on the company's ability to sustain its cash flow generation and balance sheet strength, especially in the face of economic uncertainties.
The share buyback program's completion timeline, set to end on December 31, 2024, provides a clear window during which market participants can expect buyback activity. This can create a temporary support for the stock price due to the anticipated demand for shares. Moreover, the stipulation that the purchase price will not exceed 110% of the average market price is a safeguard against overpaying for the shares, which is a prudent measure to protect shareholder value.
Market conditions will dictate the pace and scale of the buybacks and as such, Stellantis's approach appears flexible and responsive to changing market dynamics. The impact of such a program on the stock's liquidity and volatility should also be monitored, as significant buyback activity can alter the supply-demand balance in the market.
Stellantis's commitment to comply with the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052 ensures that the share buyback program adheres to legal frameworks designed to prevent market manipulation and insider trading. The regulations require transparency and fair dealing, which is critical for maintaining investor confidence in the market. The company's pledge to provide regular updates via press releases is an additional measure that supports transparency and allows shareholders and potential investors to make informed decisions based on the company's actions.
Stellantis Approves Share Buyback Program
AMSTERDAM, February 15, 2024 – The Stellantis Board of Directors approved a share buyback program of up to
The Company intends to cancel the common shares acquired through the share buyback program apart from a portion of up to
The opportunity to initiate the buyback program stems from the Company’s significant cash flow generation and strong balance sheet. These factors enable the Company to ensure adequate liquidity to manage a wide variety of economic and market scenarios, while simultaneously facilitating attractive capital returns to shareholders, and to support the extension of the employee stock purchase plan to several countries.
The share buyback program will be carried out under the authority granted by the general meeting of shareholders held on April 13, 2023, which may be renewed or extended, up to a maximum of
As of February 15, 2024, the Company held in treasury a total of 142,090,297 common shares equal to
Stellantis will provide updates on the start of buybacks and on the buyback program via a press release posted on the Investors section of the corporate website under “Stock and Shareholder Info”. The buybacks will be carried out subject to market conditions and in compliance with applicable rules and regulations, including the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052.
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About Stellantis
Stellantis N.V. (NYSE: STLA / Euronext Milan: STLAM / Euronext Paris: STLAP) is one of the world’s leading automakers aiming to provide clean, safe and affordable freedom of mobility to all. It’s best known for its unique portfolio of iconic and innovative brands including Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep®, Lancia, Maserati, Opel, Peugeot, Ram, Vauxhall, Free2move and Leasys. Stellantis is executing its Dare Forward 2030, a bold strategic plan that paves the way to achieve the ambitious target of becoming a carbon net zero mobility tech company by 2038, while creating added value for all stakeholders. For more information, visit www.stellantis.com
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| For more information, contact: Fernão SILVEIRA +31 6 43 25 43 41 – fernao.silveira@stellantis.com communications@stellantis.com www.stellantis.com | ||||||||
FORWARD-LOOKING STATEMENTS
This communication contains forward-looking statements. In particular, statements regarding future events and anticipated results of operations, business strategies, the anticipated benefits of the proposed transaction, future financial and operating results, the anticipated closing date for the proposed transaction and other anticipated aspects of our operations or operating results are forward-looking statements. These statements may include terms such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “outlook”, “prospects”, “plan”, or similar terms. Forward-looking statements are not guarantees of future performance. Rather, they are based on Stellantis’ current state of knowledge, future expectations and projections about future events and are by their nature, subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should not be placed on them.
Actual results may differ materially from those expressed in forward-looking statements as a result of a variety of factors, including: the impact of the COVID-19 pandemic, the ability of Stellantis to launch new products successfully and to maintain vehicle shipment volumes; changes in the global financial markets, general economic environment and changes in demand for automotive products, which is subject to cyclicality; changes in local economic and political conditions, changes in trade policy and the imposition of global and regional tariffs or tariffs targeted to the automotive industry, the enactment of tax reforms or other changes in tax laws and regulations; Stellantis’ ability to expand certain of their brands globally; its ability to offer innovative, attractive products; its ability to develop, manufacture and sell vehicles with advanced features including enhanced electrification, connectivity and autonomous-driving characteristics; various types of claims, lawsuits, governmental investigations and other contingencies, including product liability and warranty claims and environmental claims, investigations and lawsuits; material operating expenditures in relation to compliance with environmental, health and safety regulations; the intense level of competition in the automotive industry, which may increase due to consolidation; exposure to shortfalls in the funding of Stellantis’ defined benefit pension plans; the ability to provide or arrange for access to adequate financing for dealers and retail customers and associated risks related to the establishment and operations of financial services companies; the ability to access funding to execute Stellantis’ business plans and improve its businesses, financial condition and results of operations; a significant malfunction, disruption or security breach compromising information technology systems or the electronic control systems contained in Stellantis’ vehicles; Stellantis’ ability to realize anticipated benefits from joint venture arrangements; disruptions arising from political, social and economic instability; risks associated with our relationships with employees, dealers and suppliers; increases in costs, disruptions of supply or shortages of raw materials, parts, components and systems used in Stellantis’ vehicles; developments in labor and industrial relations and developments in applicable labor laws; exchange rate fluctuations, interest rate changes, credit risk and other market risks; political and civil unrest; earthquakes or other disasters; risks and other items described in the Company’s Annual Report on Form 20-F for the year ended December 31, 2022 and Current Reports on Form 6-K and amendments thereto filed with the SEC; and other risks and uncertainties.
Any forward-looking statements contained in this communication speak only as of the date of this document and Stellantis disclaims any obligation to update or revise publicly forward-looking statements. Further information concerning Stellantis and its businesses, including factors that could materially affect Stellantis’ financial results, is included in Stellantis’ reports and filings with the U.S. Securities and Exchange Commission and AFM.
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FAQ
What is the total value of Stellantis' share buyback program?
When will the share buyback program end?
Where will the shares be purchased?
What is the purpose of Stellantis' share buyback program?
How will the purchase price per common share be determined?
