The transactions in question, known as "window dressing, " involve repurchase agreements, or repos, a form of short-term borrowing that allows banks to take bigger trading risks.
Interestingly, share repurchases present the converse situation, in which share prices tend to rise when the repurchase is announced, yet companies executing heavy buybacks tend to underperform over the longer term.
When a company like Merck announces intent to repurchase that much stock it usually means that the directors think that it is undervalued on a long-term basis.