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General Motors to acquire SoftBank's stake in Cruise

General Motors GM is set to raise its stake in its autonomous vehicle (AV) arm Cruise. The auto giant recently announced plans of acquiring SoftBank Vision Fund 1’s equity ownership stake in Cruise for $2.1 billion. It will additionally invest $1.35 billion in Cruise, replacing a previous commitment made by the fund in 2018. GM had acquired a majority ownership stake in Cruise in 2016. Since then, its AV arm has made its reputation in self-driving cars and commercial autonomous ridesharing and delivery.

By leveraging its strong balance sheet, GM is capitalizing on the scope to increase its equity investment in Cruise. Moelis & Company LLC acted as financial advisor to GM.

The announcement follows the launch of Cruise’s limited driverless robot-taxi service to the public in San Francisco six weeks earlier. In turn, Softbank unlocked its previously committed $1.35 billion investment.

Last month Cruise became the first-ever company to offer fully driverless rides to the public in a major U.S. city, inching close to a more sustainable and accessible transportation future.

Meanwhile, in an attempt at retaining talent, Cruise has launched its Recurring Liquidity Opportunity Program, which aims to give employees the potential for long-term share price upside and flexibility around share liquidity without taking a step toward an IPO.

Under the program, current and former employees can sell any amount of their vested equity in each quarter which will be purchased by GM or others. The value is determined by a third-party financial firm that will gauge company performance, financial projections, market conditions, relevant transactions and fundraising events and market comps. It will help Cruise remain competitive in the talent market against both public and private companies as it sets out for its commercialization phase.

The Cruise Origin is a zero-emission, shared AV designed to operate without a human driver and harps on the need for sustainable driving. It helps reduce dependency on oil and expand mobility options for seniors, the visually impaired and anybody challenged with access to transportation.

https://www.nasdaq.com/articles/general-motors-gm-to-acquire-softbanks-stake-in-cruise

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