...February 22, 2024 This report does not constitute a rating action. FRANKFURT (S&P Global Ratings) Feb. 22, 2024--S&P Global Ratings said today that the new share buyback policy that Mercedes-Benz Group AG (A/Stable/A-1) has instituted does not materially affect the company's rating headroom at this stage. Mercedes declared its intention to use all of its future industrial business free cash flow (FCF IB) after dividends and M&A for share buybacks. In our view, this is tantamount to keeping its net industrial liquidity position roughly flat around 32 billion at end-2023. This equates to an S&P Global Ratings adjusted net cash position of more than 13 billion--very strong for the current rating. Although we view this new commitment to share buybacks as unfavorable to creditors in principle, we regard as crucial the linkage of buybacks to the company's future FCF IB, thereby allowing buyback levels to wax and wane with industry conditions. Our view of the share buyback policy could change...
