Equity

12 Months Ended

Dec. 31, 2019

The Merck certificate of incorporation authorizes 6,500,000,000 shares of common stock and 20,000,000 shares of preferred stock.

Capital Stock

A summary of common stock and treasury stock transactions (shares in millions) is as follows:



	2019			2018			2017
	Common Stock	Treasury Stock		Common Stock	Treasury Stock		Common Stock	Treasury Stock
Balance January 1	3,577	985		3,577	880		3,577	828
Purchases of treasury stock	—	66		—	122		—	67
Issuances ⁽¹⁾	—	(13	)	—	(17	)	—	(15	)
Balance December 31	3,577	1,038		3,577	985		3,577	880


⁽¹⁾	Issuances primarily reflect activity under share-based compensation plans.

On October 25, 2018, the Company entered into accelerated share repurchase (ASR) agreements with two third-party financial institutions (Dealers). Under the ASR agreements, Merck agreed to purchase $5 billion of Merck’s common stock, in total, with an initial delivery of 56.7 million shares of Merck’s common stock, based on the then-current market price, made by the Dealers to Merck, and payments of $5 billion made by Merck to the Dealers on October 29, 2018, which were funded with existing cash and investments, as well as short-term borrowings. The payments to the Dealers were recorded as reductions to shareholders’ equity, consisting of a $4 billion increase in treasury stock, which reflected the value of the initial 56.7 million shares received on October 29, 2018, and a $1 billion decrease in other-paid-in capital, which reflected the value of the stock held back by the Dealers pending final settlement. Upon settlement of the ASR agreements in April 2019, Merck received an additional 7.7 million shares as determined by the average daily volume weighted-average price of Merck’s common stock during the term of the ASR program, less a negotiated discount, bringing the total shares received by Merck under this program to 64.4 million.