| NEW YORK
NEW YORK General Motors Co's (GM.N) initial public offering became the world's biggest at $23.1 billion after underwriters swiftly took up additional shares following last week's IPO.
The added shares vaulted GM past Agricultural Bank of China's (601288.SS) $22.1 billion IPO in July and underscored the strong demand for the taxpayer-rescued automaker's stock.
GM said on Friday that underwriters led by Morgan Stanley (MS.N), JPMorgan Chase & Co (JPM.N), Bank of America Merrill Lynch (BAC.N) and Citigroup Inc (C.N), exercised their full option on an additional 71.7 million common shares worth $2.37 billion.
They also exercised an option to purchase 13 million preferred shares for $650 million.
Underwriters had 30 days from the IPO to exercise the options.
GM last week had raised $20.1 billion in an IPO of common and preferred shares in what was the biggest U.S. IPO ever. Without the preferred shares, GM's IPO would have been smaller than China's AgBank.
On November 18, their first day of trading, the shares rose 3.6 percent. They closed on Friday up 33 cents at $33.81, or 2.5 percent above the $33 IPO price.
The U.S. government bailed out GM for $50 billion after the automaker's 2009 bankruptcy.
The IPO caps the first stage of a turnaround that has taken the 102-year-old automaker from near-death to an unlikely Wall Street flotation favorite in 2010.
A successful stock debut may help the Obama administration argue that the controversial taxpayer bailout of GM was worthwhile.
The White House has said U.S. taxpayers are on track to recoup the full investment made by the administration and that it hopes to make substantial progress toward shedding the government's stake entirely by mid-to-late 2012.
The strong response to the stock sale reflects growing investor confidence that GM is moving beyond its unpopular, taxpayer-funded bankruptcy with sharply lower costs and higher profit potential.
The U.S. Treasury remain GM's largest shareholder after the IPO with a third of the shares outstanding.
Barclays Capital, Deutsche Bank, Goldman Sachs, Credit Suisse and Royal Bank of Canada are GM's other major underwriters. Lazard and Boston Consulting Group served as advisers to the Treasury. Evercore Partners advised GM.
In the days before the IPO, the price range and the number of shares, including preferred, were all increased.
GM last week sold 478 million common shares at $33 each, raising $15.77 billion, as well as $4.35 billion in preferred shares, more than the initially planned $4 billion.
(Reporting by Clare Baldwin and Jonathan Spicer; editing by Carol Bishopric and Tim Dobbyn)