By Ed Frankl 
 

Shares in BASF SE jumped on Tuesday after the company said it was launching its first share-buyback program in more than a decade, citing positive business development and divestitures in 2021.

Shares at 1430 GMT were up 4.7% to EUR65.51.

The German chemical conglomerate said it would launch a 3 billion-euro ($3.39 billion) buyback, or around 5% of shares outstanding, between this month and the close of 2023.

The move should be a "material positive for shareholders", and provide comfort in BASF's ability to fund a growing dividend, analysts at Jefferies said.

All repurchased shares will be canceled, with BASF reducing its share capital accordingly, the Ludwigshafen-based company said.

BASF said the buyback would add value for its shareholders above its progressive dividend policy. It also said it will prioritize organic growth in the use of capital, with acquisitions currently less relevant for the company.

The DAX-listed company said the buyback is based on authorization from an annual shareholders' meeting in May 2017, which allowed the company's board to purchase up to 10% of shares at the time until May 11, 2022. It now plans to propose renewing the authorization at its 2022 AGM.

BASF bought back shares for around EUR9.9 billion between 1999 and 2008, and reduced the number of outstanding shares by around 29%, it said.

 

Giulia Petroni contributed to this story.

 

Write to Ed Frankl at edward.frankl@dowjones.com

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(END) Dow Jones Newswires

January 04, 2022 10:02 ET (15:02 GMT)

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