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The GM car plant in Oshawa, Ont., shown on July 20, 2013.

PETER POWER/The Globe and Mail

The federal government says it has a deal in place to sell 30 million shares of GM stock as it looks to phase out the unprecedented support provided to the North American auto industry during the financial crisis.

Canada GEN, the Crown agency that manages the GM shares held by Ottawa and the Province of Ontario, announced Tuesday after markets closed that it has entered into an agreement to sell 30 million shares of GM stock to Merrill Lynch and RBC Dominion Securities Inc.

Trading of General Motors shares closed at $37, meaning the sale could be worth about $1.1-billion. The exact amount was not confirmed Tuesday. Further details will be made available over the next several days as Canada GEN reports its trade with U.S. and Canadian securities regulators.

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The proposed sale still leaves Canada GEN with 110,084,746 shares of GM common stock and 16,101,695 shares of GM Series A Preferred Stock. About a third of the shares are managed by Ottawa on behalf of Ontario.

In its most recent quarterly report, Canada GEN estimated in June that its holdings of GM shares at that time were worth $4.9-billion.

Ottawa and Ontario worked with the U.S. government to intervene in the auto business during the financial crisis of 2009. Ottawa and Ontario invested a combined $13.7-billion in GM and Chrysler. All remaining Chrysler shares have already been sold.

The governments would need to sell shares at more than $50 each in order to fully recoup their investment; however, both governments recognized early on that they would not be making money on the purchase.

For accounting purposes, Ottawa booked its shares at a value of $15 each in 2009, meaning that if they are sold above that price, the difference would be added to Ottawa's bottom line after giving Ontario its one-third stake. Ontario booked the stock at $13.

"As we said from the start, our investment in GM was always meant to be temporary as we worked to maximize the return to Canadian taxpayers," Finance Minister Jim Flaherty said in a statement Tuesday.

"We do not believe that any government should be a shareholder of a private corporation for an indefinite period of time. The Government of Canada is committed to exiting from ownership of GM as quickly as feasible, while maximizing the return for Canadian taxpayers, as we demonstrated today."

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With a report from Steven Chase in Ottawa

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