PEORIA, Ill. (AP) -- Caterpillar announced a $1 billion accelerated stock buyback program Friday, its first stock repurchase in more than four years.
Under the agreement, Caterpillar will repurchase the common stock from Citi, with an immediate delivery of about 11 million shares based on current market prices.
The exact number of shares to be bought back and the cost to Caterpillar will be based on the company's average stock price during the term of the deal, which is expected to be completed in June, Caterpillar said.
The heavy equipment company said its strong finances and cash flow performance make this a good time to reward its shareholders.
In 2007, Caterpillar's board approved the repurchase of $7.5 billion of stock and in 2011 the authorization was extended through the end of 2015. As of the end of 2008, $3.8 billion in shares had been bought back and no shares have been repurchased since then, the company said.
Shares of Caterpillar Inc., based in Peoria, Ill., rose 91 cents to $84.69.