Siemens Starts $5.5 Billion Share Buyback Announced November

Siemens AG, Europe’s largest engineering company, will start its 4 billion-euro ($5.5 billion) share buyback today as it seeks to boost shareholder returns.

No more than 47.8 million shares will be purchased and repurchasing will end on Oct. 31, 2015, the Munich-based company said today in a statement. The buyback was first announced on Nov. 7.

Chief Executive Officer Joe Kaeser is adjusting the company’s capital structure as he seeks to reward shareholders that have seen the share price drop since the beginning of the year. The former finance chief intends to increase the German company’s profitability to catch up with rivals such as ABB Ltd. and General Electric Co.

“The buyback serves the sole purposes of canceling and reducing the capital stock, issuing shares to employees, board members of affiliated companies and members of the managing board of Siemens AG as well as servicing convertible bonds and warrant bonds,” the company said in the statement.

The shares rose 0.5 percent to 97.12 euros as of 9:02 a.m. in Frankfurt trading. The stock has fallen 2.3 percent this year for a market value of 85.5 billion euros.

Kaeser plans to raise the company’s profit margin to about 10 percent of sales this year from 7.6 percent in 2013, he said in November. The manager became CEO after predecessor Peter Loescher slashed a profit target five times in his six-year tenure.

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