Stellantis, one of the world's leading automakers, has announced the launch of the first tranche of its share buyback program (the "Program") that was announced on February 22, 2023. The Program aims to repurchase up to €1.5 billion worth of common shares in the open market and cancel them to enhance shareholder value and optimize capital structure.
The first tranche of the Program will cover a maximum amount of €500 million and will run from March 17, 2023, to June 19, 2023. The Company has signed a share repurchase agreement with an independent investment firm that will make its trading decisions regarding the timing and volume of the purchases independently of Stellantis.
The general meeting of shareholders authorizes the Program held on April 13, 2022, which granted Stellantis the right to repurchase up to 10% of its share capital or any renewed or extended authorization that will be granted at a future general meeting. The purchase price per share will not exceed an amount equal to 110% of the market price of the shares on the NYSE, Euronext Milan, or Euronext Paris. The market price will be calculated as the average of the highest price on each of the five trading days preceding the acquisition date.
The Program follows a previous repurchase operation that Stellantis executed on September 15, 2022, with General Motors Holdings LLC ("GM"), a subsidiary of General Motors Company ("GM"). Under this operation, Stellantis repurchased 69.1 million common shares (2.2% of its share capital) from GM for €1 billion in cash. GM had received these shares upon exercising equity warrants that it had obtained as part of a deal that involved the purchase of Opel Vauxhall automotive business by PSA, one of the predecessors of Stellantis. In addition to the shares, Stellantis also delivered to GM approximately 1.2 million common shares of Faurecia, a French automotive supplier, and an aggregate cash amount of approximately €130 million for rights to dividends paid by PSA and Stellantis.
The share buyback program reflects Stellantis' strong financial performance and cash generation since its creation in January 2022 through the merger of Fiat Chrysler Automobiles ("FCA") and PSA. Stellantis reported a record adjusted operating income margin of 11.4% and a free cash flow of €5.9 billion for the first half of 2023. The company also reaffirmed its full-year guidance of achieving an adjusted operating income margin above 10% and a free cash flow above €10 billion.
Stellantis is committed to creating long-term value for its shareholders by pursuing its strategic vision of becoming a global leader in sustainable mobility. Stellantis has a diversified portfolio of iconic brands covering all segments and markets, including Jeep, Ram, Peugeot, Citroen, Fiat, Alfa Romeo, Maserati, Opel/Vauxhall, and Chrysler/Dodge. The company also has a strong presence in electrification, with more than 40 electrified models across its range and plans to invest more than €30 billion in electrification and software by 2025.
Stellantis is confident its share buyback program will enhance its attractiveness to investors and support its growth ambitions in the rapidly changing automotive industry.