GM buys back 120 million shares from UAW

General Motors announced on Monday morning that it has come to terms with the United Auto Workers to purchase 120 million shares of its Series A Preferred Stock from the union’s Retiree Medical Benefits, better known as VEBA.

All in, GM will pay the UAW about $3.2 billion for the 120 million shares, netting a per unit price of about $27. GM said it expects to record a special charge of $800 million related to the purchase in the third quarter.

The UAW’s VEBA health care fund currently holds 260 million shares of Series A Preferred Stock. Canada Holdings also has 16 million shares of GM stock in its portfolio.

While GM is buying back its stock, the federal government is selling off its remaining shares in the Detroit automaker. The Treasury Department recently sold off over 110 million shares of GM stock, leaving the government with about 101 million GM shares. The United States expects to exit GM ownership by the end of 2014.

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