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Daimler unveils share buyback plan

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Daimler unveils share buyback plan
Photo: DPA
14:24 CEST+02:00
German auto manufacturer Daimler said on Tuesday it would buy back about 96.4 million of its own shares, some 10 percent of its outstanding stock, for up to €6 billion ($9.3 billion).

Daimler's capital structure would also be improved by "reducing the use of equity capital, which is more expensive than debt capital," a Daimler statement said. "This will avoid investment decisions being limited by excessively high capital costs."

Shares acquired through the action would be either cancelled or possibly used later as part of stock option plans, the statement added. "In order to optimize the buyback, shares may also be acquired with the use of derivatives," Daimler said.

The company's board set a deadline of April 8 2009 for the operation, which comes following another buyback programme worth €6.2 billion that ended in March and allowed Daimler to recoup 99.8 million of its own shares. "The share buyback will be managed by a bank, which will make its decisions on the timing of individual share purchases and the use of derivatives independently and without any influence from Daimler," the group said.

The price of Daimler shares was showing as gain of 3.75 percent to €45.32 in midday trading on the Frankfurt stock exchange. The Dax index of blue-chip shares showed a gain of 1.42 percent overall.

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