DETROIT – General Motors announced it will buy 200 million shares of GM common stock held by the U.S. Treasury department for $5.5 billion. GM said the buyback is part of the Treasury’s plan to fully exit its holdings of GM stock within 12 to 15 months. GM is purchasing the shares for $27.50 apiece.
According to GM, the repurchase price is a 7.9% premium over the closing price on Dec. 18, 2012, and the company expects the share buyback to conclude by the end of the year. After the repurchase the U.S. will still own approximately 300 million shares of GM common stock, which is roughly 19% of the outstanding shares.
GM noted that since it received funds as part of the auto industry rescue in 2008, it has announced investments of more than $7.3 billion in the U.S. and created or retained more than 20,000 jobs.
“This announcement is an important step in bringing closure to the successful auto industry rescue, it 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, chairman and CEO of GM.