United Parcel Service Inc. (UPS:US), the world’s biggest package-delivery company, approved a $5 billion share buyback program and boosted the amount of cash it plans to use to buy TNT Express NV. (TNTE)
The share repurchase plan has no expiration date and replaces one announced in 2008, Atlanta-based UPS said in a statement today. The company announced the authorization after its annual meeting.
UPS, which announced in March that it will buy TNT Express for $6.8 billion to expand in Europe, said it plans to finance the purchase with about $5 billion in cash and $1.8 billion in debt. That’s a $2 billion-increase in the cash portion compared with the company’s original guidance.
“UPS’s legacy of financial strength allows us to complete the acquisition of TNT primarily using cash,” Chief Executive Officer Scott Davis said in the statement. “At the same time, UPS remains committed to its policy of shareowner returns through dividends and share repurchases.”
UPS also said it plans to buy back $1.5 billion of stock this year and next. In January, the company forecast it would spend $2.7 billion on share repurchases this year, the same as what it spent in 2011.
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