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Shares of


(MRK) - Get Merck & Co., Inc. (MRK) Report

surged more than 5% Tuesday after the company announced plans to buy back up to $10 billion of its common stock.

The announcement, which came less than a half-hour before the end of the session, sent shares of Merck higher by 3 1/4 points, or 5%, to 65 1/4 following a relatively uneventful session.

Merck said it remains committed to returning a portion of its profits to shareholders through dividends and repurchase programs, even though it usually directs its cash flows toward research and development programs.

Merck also said an unspecified portion of the shares bought back would be put in its employee benefits programs, while others would be used for "general corporate purposes."

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Stock purchases will be made in the open market in block transactions and privately negotiated transactions.

Some of Merck's largest shareholders include

Fidelity Investments

(91 million shares),

Barclays Bank

(69 million shares) and

State Street

(44 million shares).

Merck also announced a quarterly common stock dividend of 29 cents a share, payable to shareholders of record at the close of trading on March 3.