Mondelez International (NASDAQ: MDLZ) is still relatively lesser known than it when it was all a part of Kraft, but investors have racked up gains if they remained. The shares hit a post-breakup high after news of a large increase to the stock buyback program. Some buybacks matter, some do not. This one matters and it is coming on the back of Starbucks Corp. (NASDAQ: SBUX).

Mondelez announced on Tuesday that it is adding an incremental $1.7 billion to what is an existing share buyback plan. The announcement appears to be in conjunction with the arbitration ruling from a month ago whereby Starbucks Corporation (NASDAQ: SBUX) was ordered to pay about $2.7 billion gross. The net proceeds should be close to the $1.7 billion after you back out taxes.

Why this buyback matters so much is that the $1.7 billion incremental addition is actually part of an accelerated share repurchase program. This accelerated stock buyback plan is also expected to end no later than the second quarter of 2014. After the accelerated buyback plan is completed in the first half of 2014 the $4.8 billion or so remaining will be good through 2016.

This should make it easier for the company to achieve double digit earnings per share growth as well. Thomson Reuters was calling for only 2% sales growth in 2013 and about 4% sales growth in 2014. The mechanics of a stock buyback act to lower the total share count, which drives up earnings per share even if net income applicable to shareholders grows at a lower rate.

A comparison of size shows that the buyback matters. The $7.7 billion in size compares to a market cap of about $59.5 billion for Mondelez. Starbucks has a market cap of $60.7 billion and it recently conducted a small capital raise by issuing debt.

Merrill Lynch opined in a research report on Tuesday that the accelerated buyback should add close to $0.05 of earnings per share annually, and the firm’s $37 price target implies close to 11% upside from Monday’s closing price of $33.44 and slightly less upside than the $34.39 high hit on Tuesday morning.

On a separate note, Standard & Poor’s said that Mondelez would not have any credit rating impact from the buyback. The rating of BBB remains “Stable” according to ratings agency.

We would point out that the consensus price target for Mondelez is $34.35. If Starbucks Corp. (NASDAQ: SBUX) is truly hurting, you cannot see it in the stock. This stock closed at $80.55 against a 52-week range of $49.56 to $82.50 and the shares are up marginally since the news broke.

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