Canada to sell 4.6% stake in GM to Goldman Sachs & Co. – The Detroit News
The Canadian federal government said Monday it will sell its 73.4 million shares of General Motors Co. stock to Goldman, Sachs & Co., ending nearly six years of government ownership into the Detroit automaker.
Canada GEN Investment Corporation, a subsidiary of Canada Development Investment Corp., said the sale — which accounts for about 4.6 percent of GM’s outstanding shares — will happen in a block trade by Friday. The corporation said more details about the sale would be available in the “next several days” after Canada GEN reports the trade with U.S. and Canadian securities regulators.
Proceeds will be in U.S. dollars and converted to “Canadian currency gradually over a period of time,” Canada GEN said in a news release.
The shares would be worth about $2.7 billion based on GM’s close of $36.66 a share Monday.
GM declined to comment.
“Like any shareholder, the decision by the Canadian government to sell rests solely with them,” GM spokesman Tom Henderson said in an email.
In 2008 and 2009, the United States gave GM a $49.5 billion bailout, while the Canadian and Ontario governments contributed about $10 billion, including $4.8 billion from Ontario for GM and Chrysler.
The U.S. exited its final stake in the Detroit automaker in December 2013.
In 2014, the federal and Canadian governments owned 7 percent of GM’s common stock. In February, the Ontario government said it had sold all of its final 36.7 million shares that it received as part of Canada’s $10 billion bailout of GM. The Ontario Finance Ministry said the shares sold for $1.1 billion and money would go into a trust to help public infrastructure in Ontario.
In a January regulatory filing, Canada GEN Investment Corporation said that an arrangement between the Canadian government and Ontario, in which Canada had committed to provide Ontario with one-third of proceeds from the sale of any stock held by Canada GEN and a third of dividends received by Canada GEN, had been terminated.
The head of the Canadian Unifor union previously has spoken out against Canada and Ontario selling their stakes in the company, especially given uncertainty about GM’s Oshawa, Ontario assembly plant, which analysts say is at high risk to close.
“If Canada wants to have a robust auto manufacturing industry, our governments must play a role,” Jerry Dias, president of Unifor (the union created by the Canadian Auto Workers’ merger with the Communications, Energy and Paperworkers Union) said in a February statement. “We strongly urge the federal government to hold onto its shares.”
GM has said it will wait until next year before deciding any new vehicle commitments or investments at Oshawa. The plant is slated to lose a high-volume vehicle, the Chevrolet Camaro, later this year.
In exchange for the bailout money, GM promised to launch five new vehicles in Canada, including a Canadian-made hybrid, and to keep at least 16 percent of North American production there through 2016.
A GM spokeswoman said all those mandates will be met or exceeded.