GM to buy SoftBank’s stake in Cruise self-driving unit
DETROIT – General Motors is acquiring SoftBank Vision Fund 1’s equity ownership stake in its majority-owned Cruise autonomous vehicle unit for $2.1 billion, the automaker announced Friday afternoon.
Softbank first acquired a minority ownership in Cruise in 2018. Its exit comes as the prominent technology investment firm was set to have to invest a second tranche of $1.35 billion upon Cruise’s commercial deployment of vehicles, which GM will now pay.
It also follows Cruise CEO Dan Ammann abruptly leaving the company in December. Ammann was reportedly let go from Cruise by GM CEO and Chair Mary Barra, who also chairs Cruise’s board, over disagreements in strategy, including when to take the company public.
The announcement was made in conjunction with GM and Cruise also announcing the launch of a “Recurring Liquidity Opportunity Program”, in which Cruise employees with vested stock options will be able to sell them to GM.
“Employees can sell as many vested shares as they like at a fair price determined by a third party,” Cruise CEO Kyle Vogt said on Twitter. “Or they can hold onto their shares and hope for appreciation over time.”
The program is apparently intended to help retain Cruise employees who may have been hoping for a windfall from an initial public offering of the company, something that Wall Street has been hoping for as well.
But it appears that GM and Cruise have decided to wait on that IPO. A Cruise IPO would be a “major distraction, especially right now” as the company is scaling up its newly-launched driverless ride-hailing service in San Francisco, Vogt said on Twitter.
A GM spokesman said SoftBank’s exit from the company was not related to the employee program.
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