Nestle Plans $20.8 Billion Share Buyback Over the Next 3 Years

By Brian BlackstoneFeaturesDow Jones Newswires

Nestlé SA said Tuesday it will buy back up to CHF20 billion ($20.8 billion) of its shares through June 2020 and focus its investment spending on coffee, bottled water and other high-growth segments as the consumer giant faces intense investor pressure to deliver faster returns.

After an internal review by the company's board, "Nestlé determined that capital spending will be focused particularly on advancing high-growth food and beverage categories such as coffee, pet care, infant nutrition and bottled water, as well as expanding its presence in high-growth geographic markets," the company said.

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It also said it would pursue opportunities in consumer health care.

Nestlé said its share buybacks will start July 4, 2017.

"The volume of monthly share buybacks will depend on market conditions, but is likely to be backloaded in 2019 and 2020 to allow the pursuit of value-creating acquisition opportunities," it said.

Tuesday's announcement came two days after activist investor Daniel Loeb's Third Point hedge fund disclosed a $3.5 billion stake in Nestlé -- or about 1.25% of Nestlé shares -- and demanded a series of changes to boost shareholder returns. These included a formal margin target, more share buybacks and a sale of Nestlé's stake in French cosmetics firm L'Oréal.

Write to Brian Blackstone at

(END) Dow Jones Newswires

June 27, 2017 12:57 ET (16:57 GMT)