Here are your FOX Business Flash top headlines for March 18.
General Motors Co. said it is buying out SoftBank Vision Fund L.P.’s stake in its Cruise division for $2.1 billion, roughly four years after the Japanese investment firm joined the car maker in betting on driverless-car technology.
GM also said Friday it will make an additional $1.35 billion investment in GM Cruise Holdings LLC replacing a previous commitment from SoftBank.
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GM’s ownership in Cruise will be about 80% and SoftBank will no longer have an ownership interest in or have any rights with respect to Cruise after the transaction is completed.
FILE PHOTO: A self-driving GM Bolt EV is seen during a media event where Cruise, GM’s autonomous car unit, showed off its self-driving cars in San Francisco, California. REUTERS/Elijah Nouvelage (Reuters)
Investors for years have speculated that GM could spin off Cruise. Some analysts have questioned whether the abrupt departure in December of Cruise CEO Dan Ammann was a signal that GM wanted to keep the business in-house for longer than investors had anticipated.
GM Chief Executive Mary Barra recently said the Detroit auto maker wants to continue honing the technology and its plans for a future robot-taxi business before making decisions on Cruise’s future. She added, though, that separating Cruise could be on the table at some point in the future.
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“There’s so much more to do. We can go faster as opposed to looking at a specific opportunity right now,” she said during an investor conference last month.
A Cruise self-driving car in San Francisco. (Andrej Sokolow/dpa / Reuters Photos)
Like many driverless-car developers, Cruise has pushed back its commercialization plans in recent years as it refines its autonomous-driving capabilities. In October, Cruise said it plans to roll out thousands of robot taxis across U.S. cities in coming years. The company has said Cruise could reap $50 billion in revenue by the end of the decade.
SoftBank had 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, the driverless 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, collaborative partnership,” Cruise Chief Executive Kyle Vogt said in a statement. Mr. Vogt, Cruise’s founder, was named CEO last month.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | GENERAL MOTORS CO. | 44.83 | +1.17 | +2.68% |
Also Friday, Cruise said it has established a program that gives employees the opportunity quarterly to sell vested shares in the company, a move aimed at keeping and attracting talent.
In a blog post, Mr. Vogt said the so-called recurring liquidity opportunity program would “provide IPO-like liquidity and potential upside for employees but without all the distractions of being a public company.”
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Mutual-fund company T. Rowe Price Associates Inc. and Honda Motor Co. have also taken stakes in Cruise.
Write to Denny Jacob at denny.jacob@wsj.com and Mike Colias at Mike.Colias@wsj.com
