LONDON (AFP) - British drinks giant Diageo said that it planned to return 600 million pounds (863 million euros, 1.09 billion dollars) to investors through a share buy-back.
The buy-back will be funded with proceeds from the sale of part of the group's stake in US food company General Mills earlier this month, which will also be used to repay 600 million pounds of debt, the company said in a statement.
The share purchase is expected to be completed by the end of the current financial year in June 2005.
In a statement following its annual shareholder meeting, Diageo said it expected to continue to return to shareholders surplus capital which arises from free cash flow, through a combination of share buybacks and dividend payments.
The company also confirmed its current guidance on earnings after trading in the first three months of the financial year was in line with its expectations.
Earlier this month Diageo raised 2.26 billion dollars from the sale of 49.9 million shares in General Mills Inc.
Diageo continues to hold 25 million General Mills shares, out of the 139 million originally acquired, which can be sold from October next year.