LONDON — Nestlé said on Tuesday that it planned to buy back up to nearly $21 billion worth of its shares and strike potentially sizable acquisitions in fast-growing parts of its business, as the Swiss food giant faces pressure from the American hedge fund manager Daniel S. Loeb.
In a statement, Nestlé said that its board had authorized a stock buyback of up to 20 billion Swiss francs over the next three years as a way to create value for its shareholders.
The conglomerate also said that it would consider making acquisitions in core parts of its business portfolio, including coffee, pet care and bottled water, as well as consumer health care. As part of that initiative, its stock buybacks will largely take place in 2019 and 2020 to let the company make takeovers first.
Nestlé also said that it would embark on a series of what it called “targeted” cost cuts in an effort to improve profit margins.
Though Nestlé said that its management and board had begun considering a review of the company’s finances and strategy early this year, Tuesday’s announcement follows the emergence of Mr. Loeb as a big shareholder. His activist hedge fund, Third Point, disclosed on Sunday that it has acquired a $3.5 billion stake in the company and urged a number of strategic changes.
Among them is selling off Nestlé’s stake in L’Oréal, the cosmetics maker, and considering other sales of nonessential businesses.
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