Treasury, Union Trust to Sell 50 Million GM Shares

The U.S. Dept. of the Treasury and a union retiree healthcare trust plan to sell 30 million shares and 20 million shares in General Motors Co., respectively, this week.

The stock a 3.6% GM stake was worth $1.7 billion at Wednesday's closing price of $34 per share. Citibank, JPMorgan Chase and Morgan Stanley, which are handling the sale, will set the sale price after the stock market closes on Thursday.

The timing matches GM's return to the Standard & Poor's 500 index. That action will instantly create a new pool of buyers: mutual funds whose holdings match the composition of that index. Those funds, which hold an estimated $636 billion in assets, will scramble to add the company's stock to their portfolios.

The sale would reduce the government's GM stake to 189.2 million shares, or 13.8%, from its original ownership of 60.8% in 2009. The Treasury Dept., which stated in December that it intended to divest all its GM stock over the next 12 to 15 months, says its plans have not changed.

The sale would shrink the retiree trust's holding to 140.5 million shares, or 13%. The governments of Canada and Ontario, which jointly own about a 9% stake, say they have no immediate plans to sell.