An Aggressive Style of Share Buyback Is Having a Moment

In a cooling market for share buybacks, $10 billion commitments from both carmaker General Motors and aerospace-and-defense giant RTX stand out for their irreversibility as well as their headline value. The companies had better be right that they won’t need the cash.

RTX and GM have both entered into blockbuster accelerated share repurchase agreements with banks in recent weeks—an aggressive form of buyback that requires sending all the money out of the door at once. Thanks to these transactions, ASRs are on track for their second-best quarter since the start of the pandemic, according to data provider VerityData. Health-insurance provider Cigna is also planning an ASR next quarter as part of a $10 billion buyback program following the collapse of its anticipated tie-up with Humana, it said Sunday.