Here are your top FOX Business Flash headlines for March 18th.
General Motors Co. said it was buying out SoftBank Vision Fund LP’s stake in its Cruise division for $2.1 billion, about four years after the Japanese investment firm joined the automaker in betting on self-driving car technology.
On Friday, GM also said it would make an additional $1.35 billion investment in GM Cruise Holdings LLC, replacing SoftBank’s previous commitment.
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GM’s stake in Cruise will be about 80%, and SoftBank will no longer have a stake or any rights in Cruise after the transaction is completed.
PHOTO: GM Bolt self-driving electric vehicle at a media event where Cruise, GM’s autonomous vehicle division, showcased its self-driving vehicles in San Francisco, California. REUTERS/Elijah Nouvelage
Investors have speculated for years that GM might spin off Cruise. Some analysts are wondering if the sudden departure in December of Cruise CEO Dan Ammann was a signal that GM wanted to keep the business inside the company longer than investors expected.
GM CEO Mary Barra recently said the Detroit automaker wants to continue honing the technology and its plans for the future of the robotic taxi business before making decisions about the future of Cruise. However, she added that the question of Cruz’s divorce may come up at some point in the future.
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“There is so much more to be done. We can work faster than looking for a specific opportunity right now,” she said at an investor conference last month.
Self-driving car Cruise in San Francisco. (Andrey Sokolov/dpa/Photo by Reuters)
Like many self-driving car developers, Cruise has shelved its commercialization plans in recent years as it improves its autonomous driving capabilities. In October, Cruise said it plans to deploy thousands of taxi robots to U.S. cities in the coming years. The company said Cruise could generate $50 billion in revenue by the end of the decade.
SoftBank held a 19.6% stake in Cruise after investing $2.25 billion in July 2018. Cruise was then a newly formed entity, primarily made up of Cruise Automation, a self-driving car developer that GM acquired in early 2016.
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“Cruise will continue to operate as it does today – an independent company working alongside GM in a flexible partnership,” Cruise CEO Kyle Vogt said in a statement. Mr. Vogt, founder of Cruise, was named CEO last month.
| Ticker | Security | past | Change | Change % |
|---|---|---|---|---|
| grandmaster | GENERAL MOTORS CO. | 44.83 | +1.17 | +2.68% |
Also Friday, Cruise said it has established a program that gives employees the opportunity to sell company-owned stock on a quarterly basis in an effort to retain and attract talent.
In a blog post, Mr. Vogt said the so-called recurring liquidity opportunity program “will provide IPO-like liquidity and growth potential for employees, but without all the distractions associated with a public company.”
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Mutual Fund Companies T. Rowe Price Associates Inc. and Honda Motor Co. also acquired stakes in Cruise.
Email Denny Jacob at [email protected] and Mike Colias at [email protected].