Adidas Plans to Buy Back Up to $1.9 Billion in Shares

Adidas, the German sportswear giant, said on Wednesday that it would return as much as 1.5 billion euros, or about $1.9 billion, to shareholders over the next three years, primarily by buying back its shares.

The company also said it remained committed to paying an annual dividend to shareholders equal to 20 to 40 percent of its net income.

“We believe that our shares are currently significantly undervalued and this provides an excellent opportunity to optimize the company’s cost of capital, deploy cash and create further value for our shareholders,” Robin J. Stalker, the company’s chief financial officer, said in a statement.

The company could buy up to 10 percent of its outstanding shares through May 2019, or about 21 million shares at the current price. Adidas plans to begin buying back shares in the fourth quarter.

Shares in Adidas rose 3 percent, to €60.79, in afternoon trading in Frankfurt on Wednesday.

The company’s stock has been under pressure in recent months as it has faced stiff competition from Nike and other rivals.

Despite the increase in its stock price on Wednesday, Adidas shares are down 23 percent since April.

The battle for supremacy between the sportswear giants was particularly evident this year as Nike and Adidas flooded venues in Brazil and broadcasts of the World Cup with competing advertisements.

Adidas also outbid Nike this summer to be the official equipment provider for Manchester United.

It agreed to pay 750 million pounds, or about $1.2 billion, to supply Manchester United, one of the world’s most valuable sports franchises, over the next 10 years, ending a 13-season partnership between Nike and the English professional soccer team.