Equity

12 Months Ended

Dec. 31, 2020

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:


	2020		2019		2018
	Common Stock	Treasury Stock	Common Stock	Treasury Stock	Common Stock	Treasury Stock
Balance January 1	3,577	1,038	3,577	985	3,577	880
Purchases of treasury stock	—	16	—	66	—	122
Issuances (1)	—	(7)	—	(13)	—	(17)
Balance December 31	3,577	1,047	3,577	1,038	3,577	985

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

In 2018, the Company entered into accelerated share repurchase (ASR) agreements with two third-party financial institutions (the 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, which were funded with existing cash and investments, as well as short-term borrowings. Upon settlement of the ASR agreements in 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.