Buyback Wednesdays – Brookfield Asset Management to Buyback 31.7 Million Shares

Buyback announcements have slowed significantly since the start of the year with only 8 companies announcing share repurchases last week. As we get into earnings season in the next few weeks, buyback announcements will start to pick back up again.

The most significant buyback of the week in dollars terms was by a healthcare technology and devices company, Agilent Technologies, Inc. (A).  The company provides application-focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide. Agilent announced a $2 billion share buyback representing around 5% of its market cap at announcement. The market has already started responding to the announcement and shares are up  5.3% since the announcement yesterday.

One of the companies from our top 5 list that stood out was Brookfield Asset Management Ltd. (BAM). On January 9, 2023, Brookfield received TSX approval to commence the repurchase of 31.7 million shares, representing around 8% of its market cap at announcement.

Brookfield Asset Management (BAM) is a new spin-off from Brookfield Corp. (BN), a company that is more than a century old. On December 9, 2022, BN completed the 25% spin-off of BAM. The spin-off was designed to benefit investors in both companies. For every four shares BN investors own, they get one share of BAM, which is now 75% owned by BN.

To make things a little confusing, the parent BN used to be called Brookfield Asset Management and changed its name to Brookfield Corp. (BN) after spinning off its asset management business as the new “BAM”. The spin-off is an asset light business and the parent BN will be investing its money in many of new BAM’s funds. Considering how young the new BAM is, most of our discussion here is related to the parent company BN.

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