Diageo plc (LON:DGE) has announced that it is commencing the next tranche of its previously announced return of capital programme of up to £4.5 billion to shareholders by 30 June 2024.
Under the first phase of the ROC programme, which was completed on 31 January 2020, Diageo repurchased shares to a value of £1.25 billion. Diageo initiated the second phase of its ROC programme of up to £1.0 billion on 12 May 2021, to be completed by the end of fiscal 22. Under the first tranche of the second phase, which was completed on 12 November 2021, Diageo repurchased shares to a value of £0.45 billion.
Diageo is announcing today that it has entered into a non-discretionary agreement with Goldman Sachs International (GSI) to enable the company to buy back shares with a value of up to £0.55 billion. This agreement will commence on 26 November 2021 and will end no later than 4 March 2022. The purpose of the repurchases is to reduce the share capital of Diageo and all shares repurchased under this agreement will be cancelled.
Further execution phases of the ROC programme, utilising the most appropriate mechanic of either share buybacks or special dividends depending on market conditions, will be announced in due course.
Further details of the return of capital programme
GSI will make its trading decisions in relation to Diageo’s securities independently of and uninfluenced by Diageo. Any repurchase of shares by Diageo contemplated by this announcement will be carried out on the London Stock Exchange and/or other recognised investment exchange(s).
The share buybacks will be effected within certain pre-set parameters and in accordance with Diageo’s general authority to repurchase shares and will be conducted within the parameters prescribed by the Market Abuse Regulation 596/2014, the Commission Delegated Regulation (EU) 2016/1052 (both as incorporated into UK domestic law by the European Union (Withdrawal) Act 2018) and, in the case of Diageo, Chapter 12 of the Listing Rules.
This share buyback tranche of up to £0.55 billion will take place within the limitations of Diageo’s existing general authority to repurchase up to 233,611,282 shares granted at its 2021 annual general meeting. After taking account of the number of shares bought back under the first tranche of the second phase of the ROC programme, the maximum number of shares that can be bought back under this authority under the second tranche of the second phase of the ROC programme is 231,359,356.