Caterpillar Inc. has entered into definitive agreements with Société Générale to purchase a total of $2.5 billion of its common stock under accelerated stock repurchase transactions. In January 2014, the company announced a similar $1.7 billion transaction, which was completed in March.
“Caterpillar has invested more than $30 billion in capital expenditures, research and development, acquisitions and other growth initiatives since 2009, highlighting our commitment to our customers. Delivering on our commitments to our stockholders is also a priority for our company," said Caterpillar Chairman and CEO Doug Oberhelman. "Repurchasing an additional $2.5 billion of Caterpillar stock in the third quarter of 2014 will bring our total 2014 stock repurchases to $4.2 billion. This, combined with the 17 percent increase in our quarterly dividend announced in June, clearly shows how we are taking advantage of our strong cash position to deliver superior returns to stockholders."
“The solid operational and financial performance of our global team has enabled Caterpillar to return an additional $8 billion of capital to stockholders through stock repurchase and dividends since the beginning of 2013. And still, our balance sheet remains strong,” Oberhelman added.
Pursuant to the terms of the accelerated stock repurchase agreements, Caterpillar has agreed to repurchase a total of $2.5 billion of its common stock from Société Générale, with an immediate delivery of approximately 23 million shares based on current market prices. The final number of shares to be repurchased and the aggregate cost per share to Caterpillar will be based on Caterpillar's volume-weighted average stock price during the term of the transactions, which are expected to be completed in September 2014. In January 2014, the board of directors authorized the repurchase of $10 billion of Caterpillar stock, which will expire on December 31, 2018.