Ford Motor Co. plans to buy back up to approximately 116 million shares of company stock worth about $1.8 billion.
The Dearborn-based automaker on Wednesday said its board of directors approved the repurchase ahead of Ford’s annual meeting Thursday in Delaware. The plan, according to officials, is expected to “help offset share dilution and help improve shareholder returns."
“These actions are consistent with our overall capital strategy to take anti-dilutive actions and position ourselves to further reduce Automotive debt,” said Bob Shanks, Ford chief financial officer, in a statement. “The strength of our cash generation gives us confidence to take these actions to enhance shareholder returns. With these actions, we will reduce our diluted shares by about 3 percent.”
Ford will purchase the shares “periodically in the open market,” with the program expected to finish by the end of the year.
Ford's time frame for the plan, according Sterne Agee analyst Michael Ward, is particularly important: "The repurchase is discretionary and suggests confidence in the F-150 launch," he said in a statement. "In addition, we believe capital allocation is shifting to favor shareholders."