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Adidas buy back shares worth 3 billion EUR over the next three years

Adidas

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The sports goods brand Adidas plans to buy back shares worth 3 billion EUR over the next three years. The company’s supervisory board approved this plan at a meeting on Tuesday and its deadline was set to May 2021. The first tranche will begin on March 22 and will be for securities worth 1 billion EUR.
While the vast majority of the program will be financed through cash, Adidas also intends to use some debt financing. The redemption represents 9% of the company’s share capital. The decision is a sign of the management confidence amid the efforts of Chief Executive Kasper Rorsted to increase sales to 26 billion EUR by 2020.
Adidas recognizes tangible developments in its business due to the trend in the market for wearing sportswear. The main success of the brand comes from selling sneakers.
The buyback is in addition to company’s policy to pay a dividend in the range of 30-50 percent of net income from continuing operations.
After a strong performance in 2016 and first half of 2017, Adidas shares have fallen 15 percent in the past six months, dented by disappointing third-quarter results to trade at a discount to rival Nike despite stronger sales growth.
Adidas AG is a multinational corporation, founded and headquartered in Herzogenaurach, Germany, that designs and manufactures shoes, clothing and sport accessories. It is the largest sportswear manufacturer in Europe, and the second largest in the world, after Nike.