General Motors Corp has decided to simplify the ownership structure of its Electronic Data Systems Corp subsidiary by divesting the 180m General Motors Class E shares it holds, donating them to its worryingly underfunded pension funds; they are valued at $6,075m. The Class E shares rank equally with all other General Motors common shares in a liquidation, but pay dividends tied to Electronic Data’s profits. The move is seen as making it easier for the giant Dallas computer services company to forge strategic alliances with other major companies. General Motors will continue to have 100% of the voting equity in Electronic Data Systems, and it is still not clear how any alliance that involved a third party taking an equity stake in the subsidiary would be structured – would General Motors release some of the voting shares it holds? Electronic Data Systems has more than $607m in cash and marketable securities and says it hopes to find a new major acquisition in the near future. It is currently looking at consultants that could get it into the UK, German and French consulting markets.
