J&J: $10B Share Buyback Doesn’t Impact M&A Plans

By Jof Enriquez

Johnson & Johnson (J&J) is ready to consummate both small and large M&A deals, regardless of a $10 billion share buyback program announced recently. However, company management has stated it would adopt a disciplined approach to potential acquisitions based on long-term value.

The company’s repurchase of up to $10 billion of J&J’s common stock, which will be financed through issuance of debt, could indicate that M&A opportunities are lacking. But, considering that the buyback plan is open-ended, and that J&J reported $37 billion in cash at the end of the third quarter, the company still has the financial strength to pursue M&A deals, according to Bloomberg.

“I wouldn’t interpret the $10 billion share buyback as impacting our appetite for any size of M&A at all,” Dominic Caruso, VP, Finance and CFO, J&J, told analysts in a conference call, per a Seeking Alpha transcript. “Our appetite for M&A of any scale has entirely to do with whether or not the acquisition is going to create value for shareholders. And as you know we are disciplined about that.”


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