Canada Starts Selling Off GM Stake
The Canadian and Ontario governments are beginning to sell off the General Motors (NYSE:GM) stock they purchased to help the U.S. government bail out the Detroit automaker in 2009, during the financial crisis. On Tuesday, the governments announced they would sell 30 million common shares in the company to Bank of America (NYSE:BAC) and RBC Capital Markets, a division of the Royal Bank of Canada (NYSE:RY).
The stake was sold at a slight discount from its closing price of $37 per share on Tuesday, amounting to a deal worth $1.1 billion, according to a report from Reuters. The governments of Canada and Ontario banded together to form Canada GEN Investment Corp. to hold the $10 billion GM shares purchased to help keep the car maker afloat. After the deal goes through on Monday, the investment fund will still own more than 110 million common shares in GM.
According to the Financial Times, two-thirds of the Canadian stake in GM is owned by the federal government, with the rest owned by the government of the province of Ontario. Ontario is located near Detroit and is home to many auto plants. Canada will have an 8 percent total stake in the company after the deal closes.