GM will pay $27.50 for each share, about an 8 percent premium over Tuesday's closing price of $25.49. The shares shot up about 7 percent to $27.30 in Wednesday morning trading.
The government is almost certain to lose billions on the $49.5 billion bailout that saved GM from being auctioned off in pieces during the financial crisis in 2008 and 2009. The Treasury says it will have recouped about $28.7 billion after GM completes its buyback. So, to break even, Treasury would have to sell the remaining 300 million shares for average of about $70 each.