New York: PepsiCo said Monday that it will buy back up to $15 billion worth of its own common stock through June 2013.
Shares rose nearly 2% in premarket trading.
“The board’s action reflects continued confidence in the growth of our business and our commitment to providing strong cash returns to our shareholders,” chairman and CEO Indra Nooyi said in a statement.
The world’s second-biggest soft drink seller — whose brands include Gatorade, Quaker and Pepsi-Cola — had said before that it was buying about $4.4 billion worth of its shares this year. Some of the buybacks will be made under a prior repurchase authorization from 2007, which had $6.4 billion remaining at the start of the year and expires in June.
The company also said Monday it will boost its annual dividend by 7% to $1.92, likely starting on 30 June when it expects to pay its next quarterly dividend. The dividend will be paid to shareholders of record 4 June.
Last month PepsiCo, based in Purchase, New York, cleared the final regulatory hurdle in a bid to buy its two biggest bottlers — Pepsi Bottling Group and PepsiAmericas — allowing it to close the $7.8 billion deal.
That came within days of an announcement by rival Coca-Cola that it would buy the North American operations of its largest bottler, Coca-Cola Enterprises. Both companies want more control of distribution as consumers shift from sugary carbonated drinks to other beverages.
Control over the distribution system will allow Coca-Cola and PepsiCo to rapidly swap out the drinks they’re putting on store shelves to accommodate shifting consumer tastes.
Both believe they can also slash costs by millions.