Large-scale purchases: billions spent on buybacks in these specified stocks
In 2025, share buybacks are increasing among companies in both the American and European markets. The primary reason for this trend is that companies view their shares as undervalued and want to allocate excess cash efficiently to enhance shareholder value. This is particularly noticeable in Europe, where companies believe their valuations are structurally lower compared to other developed markets, making buybacks an attractive capital allocation strategy.
Companies such as Aegon, ASM, and Deutsche Telekom have announced buyback programs, demonstrating the widespread nature of this practice. For instance, Aegon announced a €200 million share repurchase program in mid-2025, aiming to cancel repurchased shares and thus reduce share count to boost shareholder value.
The rise in buybacks has potential implications for investors. Increased buybacks tend to raise Earnings Per Share (EPS) and share prices, benefiting investors via capital gains. However, this trend may also reduce dividend income as buybacks replace dividends.
In the U.S., companies have more flexibility with buybacks compared to dividends, as they can be quietly reduced during crises. Goldman Sachs expects $711 billion to be distributed in dividends in the S&P 500 next year, less than what will be spent on buybacks.
Some of the biggest spenders on share buybacks include American Tech companies Alphabet, Meta, Nvidia, and Microsoft, which have collectively bought back $120 billion worth of their own shares. American top companies are expected to spend $1.07 trillion on buying their own shares in 2025, according to Goldman Sachs.
In Europe, Munich Re has withdrawn over 40% of its shares from circulation since 2006, paying an average of 163 euros per share for its buybacks, with the current share price being around three times as high. Siemens has the largest nominal program in the DAX, with a volume of up to €6 billion that can be stretched out to 2029.
Meanwhile, in the automotive industry, Daimler Truck has planned up to €2 billion for repurchases, with the first half already completed. Mercedes-Benz Group is currently spending around €5 million per day on its own shares.
The trend towards buybacks is not limited to the tech and automotive sectors. European oil companies Shell, BP, and Totalenergies spent a combined $40 billion on buying back their own shares over the past 12 months.
SAP plans to spend up to €5 billion on its own shares by the end of 2025. In the long run, shares of companies that engage in buybacks have performed better than the broader U.S. market.
Some companies are even considering changing their dividend policies to include regular share buybacks. For example, BASF is considering starting regular share buybacks from 2027.
In May, Apple announced repurchases worth $110 billion. However, not all companies are doing well in the current economic environment. Mercedes-Benz, for instance, is facing significant challenges in the automotive industry.
The largest budget item for companies will remain investments at $1.15 trillion. Nevertheless, a significant portion, more than a quarter, of the total budget will flow into share buybacks.
In conclusion, share buybacks are on the rise in both the American and European markets. Companies see their shares as undervalued and want to improve capital efficiency, respond to shareholder and regulatory expectations, and allocate excess cash to enhance shareholder value. This trend has potential implications for investors, who may benefit from capital gains but might see a reduction in dividend income.
Financing these buyback programs is a significant aspect of the business strategies for numerous companies, as demonstrated by Aegon's €200 million repurchase program in 2025. Investors should consider the possible impacts of increased investing in buybacks, as it tends to boost Earnings Per Share (EPS) and share prices, offering potential capital gains, but potentially reducing dividend income.
