Adidas halts €1 billion share repurchase program to conserve cash amid recession


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Adidas halts €1 billion share repurchase program to conserve cash amid recession

On Tuesday, the 31st of March 2020, Adidas AG, the Herzogenaurach-based German multinational sportswear manufacturer, the second-largest in the world behind United States’ Nike Inc., had disclosed in a regulatory filing that the company had cancelled a €1 billion worth of share repurchase program which it had planned for this year, as the Europe’s largest sportswear designer appeared to be more absorbed with the concept of clinging on to liquidity following closure of its retail shops in Northern American and Europe amid an ongoing lockdown in multiple countries to slow down the spread of the coronavirus pandemic, even though the pandemic seemed to be approaching its peak in Europe and the numbers of newer cases would likely to decline gradually this month as projected, while Italy, the worst-hit nation in EU, had witnessed its second successive day of lower coronavirus cases, adding a ray of hope that the worst might be over for Europe.

Nonetheless, referring to a spike in economic uncertainty across the globe led by the diabolical expansion of the pandemic, Adidas AG said in its Tuesday’s (March 31st) statement, “Considering the high level of economic uncertainty caused by the dynamic developments related to the coronavirus outbreak, the Adidas Executive Board decided to proactively adopt a conservative approach to liquidity management. ”