GM To Buy Back Stock From U.S. Treasury


  • GM Logo Picture

    GM Logo Picture

    General Motors on Wednesday said it will purchase 200 million shares of stock held by the U.S. Treasury Department as part of the government's exit from GM in the next 12-15 months. | December 19, 2012

Just the Facts:
  • General Motors on Wednesday said it will purchase 200 million shares of stock held by the U.S. Treasury Department as part of the government's exit from GM in the next 12-15 months.
  • The U.S. Treasury Department said it intends to sell its other remaining 300.1 million shares through the market and may begin to do so as early as January.
  • "(This announcement) further removes the perception of government ownership of GM among customers and it demonstrates confidence in GM's progress and our future," said Dan Akerson, GM CEO, in a statement.

DETROIT — General Motors on Wednesday said it will purchase 200 million shares of stock held by the U.S. Treasury Department as part of the government's exit from GM in the next 12-15 months.

The U.S. Treasury Department said it intends to sell its other remaining 300.1 million shares through the market and may begin to do so as early as January.

"(This announcement) further removes the perception of government ownership of GM among customers and it demonstrates confidence in GM's progress and our future," said Dan Akerson, GM CEO, in a statement.

GM said it will pay $5.5 billion for the shares.

The automaker said the repurchase price of $27.50 per share represents a 7.9 percent premium over the closing price on December 18. The share buyback is expected to close by the end of the year.

"The auto industry rescue helped save more than a million jobs during a severe economic crisis, but (the Troubled Asset Relief Program) was always meant to be a temporary, emergency program," said Timothy G. Massad, U.S. Treasury Department assistant secretary for financial stability, in a statement. "The government should not be in the business of owning stakes in private companies for an indefinite period of time.

"Moving to exit our investment in GM within the next 12 to 15 months is consistent with our dual goals of winding down TARP as soon as practicable and protecting taxpayer interests."

The manner, amount and timing of the disposition of the remaining shares of stock "are dependent on a number of factors," the Treasury Department noted.

In 2008 and 2009, the U.S. government invested $49.5 billion to help stabilize and restructure GM as part of a broader rescue of the American auto industry during a severe recession. The government has recovered more than $28.7 billion of its investment in GM to date through repayments, sales of stock, dividends, interest and other income.

GM said that since the rescue, it has announced investments of more than $7.3 billion in the U.S. and "created or retained" more than 20,000 jobs.

Edmunds says: Good news for taxpayers and a reassuring indication of GM's renewed health.

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