GM announces $5B stock buyback, avoids proxy fight with 4 dissident hedge funds

Economic IndicatorsAssociated Press

General Motors is agreeing to a $5 billion stock buyback, heading off a proxy fight with a group of hedge funds.

The buyback is part of a deal with former Obama administration autos task force member Harry Wilson, who agreed to drop his hostile candidacy for the GM board.

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GM said Monday that the share repurchase will begin immediately and finish before the end of 2016.

The company still plans to keep $20 billion in cash on its balance sheet and maintain its investment-grade credit status.

GM also announced plans to return capital to shareholders that will be announced each January.

The company had $25.2 billion in cash at the end of last year. Wilson had sought an $8 billion buyback and a seat on the board.