Key Moments
- Salesforce Inc shares were trading about 2.5% higher in premarket trading on Monday following the start of a $25 billion share repurchase.
- The company initiated accelerated share repurchase agreements on March 11 covering an initial delivery of approximately 103 million shares.
- The transaction immediately executes half of Salesforce’s previously authorized $50 billion aggregate share repurchase program.
Program Overview
Salesforce Inc shares were up roughly 2.5% shortly before the U.S. market open on Monday after the company announced that it has started a $25 billion share buyback, the largest in its history.
The software company said it has begun the prepayment and initial delivery of approximately 103 million shares under accelerated share repurchase agreements that were executed on March 11 with several financial institutions. This $25 billion transaction constitutes the immediate execution of half of the $50 billion aggregate share repurchase program approved by Salesforce’s board of directors in February.
Management Commentary
Marc Benioff, chair and chief executive officer of Salesforce, said: “We are aggressively repurchasing shares because we are so confident in the future of Salesforce.”
Robin Washington, president and chief operating and financial officer of Salesforce, said the $25 billion accelerated share repurchase demonstrates the company’s heightened confidence in the resilience of its growth and cash flow profile.
Transaction Structure and Counterparties
Salesforce entered into the accelerated share repurchase agreements with Banco Santander, Bank of America, Citibank, JPMorgan Chase Bank and Morgan Stanley. J. Wood Capital Advisors is serving as an advisor on the transaction.
| Element | Detail |
|---|---|
| Total authorized program | $50 billion aggregate share repurchase program |
| Current ASR size | $25 billion |
| Initial shares delivered | Approximately 103 million shares |
| Share portion of ASR | Initial delivery represents about 80% of total shares expected to be repurchased |
| ASR agreement date | March 11 |
| Expected final settlement | Third or fourth quarter of Salesforce’s fiscal year 2027 |
Pricing and Settlement Mechanics
The approximately 103 million shares initially delivered under the accelerated share repurchase represent around 80% of the total number of shares that Salesforce anticipates will ultimately be repurchased in this transaction, based on the closing price of Salesforce’s common stock on March 11.
The final number of shares that will be repurchased will be determined generally by the volume-weighted average price of Salesforce’s common stock over the duration of the transaction, reduced by a discount and subject to certain adjustments. Final settlement of the accelerated share repurchase is expected to occur in the third or fourth quarter of Salesforce’s fiscal year 2027.
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