STMicroelectronics Announces Completion of its 2021 Share Buy-back Programs and Launch of a new 3 Year $1,100 million Share Buy-Back Plan in 2024
STMicroelectronics has announced the completion of its 2021 share buy-back program, totaling $1,040 million or 24,880,267 shares repurchased. The average purchase price was €38.67 per share. STMicroelectronics will hold these shares as treasury stock to meet obligations related to employee stock award plans and convertible bonds.
STMicroelectronics also launched a new $1,100 million share buy-back plan over three years, subject to annual shareholder approval. This plan comprises two programs to meet obligations for employee stock awards and convertible bonds. The minimum share price for buy-backs is set at €1.04, with a maximum price of 110% of the highest price over the last five trading days prior to purchase.
The company will appoint brokers to execute the buy-backs, compliant with applicable regulations and market conditions.
- Completion of $1,040 million share buy-back program.
- Launch of new $1,100 million share buy-back plan over three years.
- Repurchased shares held as treasury stock support obligations for employee stock awards and convertible bonds.
- No obligation to carry out the new share buy-back programs.
- Possibility of suspension or discontinuation of buy-back programs at any time.
Insights
STMicroelectronics' new share buy-back plan signals a strategic move to enhance shareholder value. The completion of the previous buy-back program of €962 million at an average price of €38.67 per share illustrates the company's ability to execute substantial buy-back programs efficiently. This buy-back helps reduce the number of outstanding shares, potentially increasing earnings per share (EPS) and providing support to the stock price in volatile markets.
Regarding the forthcoming $1,100 million buy-back plan, it presents both opportunities and risks. The maximum potential share acquisition (approximately 25.5 million shares, or 2.8% of issued share capital) suggests a significant reduction in float, which could positively impact the share price and investor sentiment. However, investors should be mindful of the associated costs and the potential impact on the company’s cash flow and financial flexibility, especially considering the dynamic nature of the semiconductor market.
Another point to consider is the dual-purpose nature of these buy-backs: fulfilling employee stock award plans and settling convertible bonds. This ensures that the company remains committed to rewarding and retaining talent while also managing its financial obligations prudently. However, the timing and price boundaries set for these buy-backs, such as the minimum price of €1.04 or a maximum of 110% of the average highest price in the last five trading days, introduce certain constraints that investors should keep in mind.
The semiconductor industry is marked by cyclical demand and intense competition. STMicroelectronics’ decision to launch a new share buy-back plan can be interpreted as a signal of confidence in its financial stability and future growth prospects. The substantial investment in share repurchases reflects management's belief that the current share price underestimates the company’s intrinsic value. Additionally, this strategic move might be aimed at countering market volatility and demonstrating robust financial health to investors.
From a market standpoint, the ability to repurchase shares across multiple trading venues, including Euronext Paris, Borsa Italiana and NYSE, showcases the company's global reach and liquidity options. Investors should note that such buy-back programs can provide a cushion in times of market downturns and enhance shareholder returns over time.
However, the dependency on market conditions and the potential suspension of the buy-back programs introduce an element of uncertainty. Investors should closely monitor market trends and the company’s announcements to gauge the effective execution of these programs.
PR N° C3267C
STMicroelectronics Announces Completion of its
2021 Share Buy-back Programs and Launch of a new 3 Year
AMSTERDAM – June 21st, 2024 -- STMicroelectronics N.V. (the “Company” or “STMicroelectronics”), a global semiconductor leader serving customers across the spectrum of electronics applications, announces: (A) the completion of the 3Y share buy-back programs of
The Completed Buy-Backs were carried out, and the New Buy-Backs will be carried out, in accordance with the authorization of the Supervisory Board and the provisions of the Market Abuse Regulation (EU) 596/2014 (the "Market Abuse Regulation") and Commission Delegated Regulation (EU) 2016/1052.
Details of the Completed Buy-Backs
The Completed Buy-Backs were launched on July 1, 2021 and their duration was approximately 3 years.
The Company carried out the Completed Buy-Backs and held the shares bought back as treasury stock for the purposes of (1) meeting the Company’s obligations in relation to its employee stock award plans and (2) meeting the Company's obligations arising from debt financial instruments that are exchangeable into equity instruments. The shares were held or are being held in treasury prior to being used for each such purpose and, to the extent that they were not or are not ultimately needed for such purpose, they may have been or may be used for any other lawful purpose under article 5(2) of the Market Abuse Regulation.
Through the Completed Buy-Backs, the Company repurchased a total of 24,880,267 shares, on a weighted average purchase price of
There are 911,281,920 issued shares in the Company’s capital and as of June 17th, 2024, the Company holds 7,874,440 treasury shares, representing approximately 0.9 percent of its issued share capital.
Purchases of shares were made through the regulated market of Euronext Paris.
Details of the New Buy-Backs
Each of the New Buy-Backs may be commenced at any time following the publication of this press release and again are for the purposes of, respectively, (1) meeting the Company’s obligations in relation to its employee stock award plans, totalling up to
The shares when repurchased will be recorded as under one or the other buy-back program. Once purchased, the shares may be held in treasury prior to being used for either purpose and, to the extent that they are not ultimately needed for such purpose, they may be used for any other lawful purpose under Article 5(2) of the Market Abuse Regulation (EU) 596/2014 including the purpose of any other buy-back program.
The Company will appoint one or more brokers to execute the New Buy-Backs in accordance with all applicable regulations. The brokers will make their decisions relating to the purchase of Company shares independently, including with respect to the timing of any purchases, and all purchases effected will be in compliance with daily limits on prices and volumes.
The Company’s closing share price on the New York Stock Exchange on June 18th, 2024, was
Purchases of shares will be made on one or more trading venues, which may include the regulated market of Euronext Paris, the Borsa Italiana S.p.A. and the New York Stock Exchange.
The price paid for any share purchased pursuant to the New Buy-Backs shall be subject to:
- a minimum of
- a maximum of 110 percent of the average of the highest price per common share on each of the five trading days prior to the purchase date, on each of the regulated market of Euronext Paris, the Borsa Italiana S.p.A. and New York Stock Exchange;
- a maximum of the greater of (i) the price of the last independent trade and (ii) the highest current independent purchase bid on the trading venue where the purchase is carried out; and
- all other applicable rules.
The actual timing, number and value of Company shares repurchased under the New Buy-Backs will depend on a number of factors, including market conditions, general business conditions and applicable legal requirements. The Company is not obligated to carry out either of the share buy-back programs, and, if commenced, either share buy-back program may be suspended and discontinued at any time, for any reason and without previous notice, in accordance with applicable laws and regulations.
The New Buy-Backs implement the resolution of the Company’s shareholders pursuant to its annual shareholders’ meeting held on May 22nd, 2024 to repurchase shares in accordance with the authorisation of the Supervisory Board. Continuation of the New Buy-Backs will be subject to future shareholder approval at the Company’s 2025 annual shareholders’ meeting.
The Company will announce details of any share purchases effected pursuant to the share buy-back plan, as required by applicable laws and regulations. The costs that the Company may incur in connection with the purchase of the shares pursuant to the New Buy-Backs will depend on the price and the terms on which actual purchases are made.
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014. The person submitting this information on behalf of STMicroelectronics N.V. is Lorenzo Grandi, Chief Financial Officer and President, Finance, Purchasing, ERM and Resilience.
About STMicroelectronics
At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027. Further information can be found at www.st.com.
For further information, please contact:
INVESTOR RELATIONS:
Céline Berthier
Group VP, Investor Relations
Tel: +41.22.929.58.12
celine.berthier@st.com
MEDIA RELATIONS:
Alexis Breton
Corporate External Communications
Tel: + 33 6 59 16 79 08
alexis.breton@st.com
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