Caterpillar has announced it will carry out an enormous $2.5 billion stock buyback this year.
It comes after the mining machinery manufacturer signalled a buyback of approximately $1.7 billion during the first quarter of this year.
Now Cat has entered into a definitive agreement with Societe Generale to purchase a total of $2.5 billion of its own common stock under accelerated stock repurchase transactions, an official news release stated.
“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,”Caterpillar CEO Doug Oberhelman said.
“This, combined with the 17 per cent 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.”
Cat will immediately purchase the 22 million share, valued at $2.5 billion at current market prices.
Caterpillar is current on schedule for its plan to repurchase $10 billion in stock by 31 December, 2018.
The company is up 15 per cent on the year to date performance.