The U.S. Treasury Department chose Citigroup and JPMorgan to manage the sale of shares in General Motors Co. (GM), as the government works to disentangle itself from the biggest U.S. automaker following the $50bn bailout that began in 2009.
Bloomberg reports that the department announced the selection of the banks in documents on its website Wedneday. It holds about 300 million shares after selling 200 million to Detroit-based GM for $5.5bn in December.
The agency said then that it would sell off the rest of its 19% stake within 15 months, starting as soon as January. The banks will get a commission of 1% per share for handling the sales, the Treasury documents show.
Citigroup and JPMorgan could potentially make additional money from bid-ask spreads and build relationships with clients, said Kip Weissman, a partner representing banks for Luse Gorman Pomerenk & Schick PC in Washington.
'It’s real important for major firms to be major players and to be able to get customers the stock they want', Weissman said. 'If the customers are clamoring for getting GM at a good price, JPM and Citi will be able to do that, and that means those customers will use them for other services'.
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