General Motors announced the company is buying SoftBank’s equity ownership stake in Cruise for $2.1 billion.
SoftBank Vision Fund 1 acquired a minority ownership stake for $2.25 billion back in 2018. SoftBank was about to have to invest a second tranche of $1.35 billion as part of the deal.
This second tranche was due when Cruise deployed commercial vehicles.
As part of the buyout, GM will not cover this tranche.
GM also announced that GM and Cruise are launching a “Recurring Liquidity Opportunity Program” where Cruise employees with vested stock options can sell them off to GM.
Employees can either sell off their shares at a price set by a third party or keep them.
This new program is intended to keep Cruise employees who were hoping for a windfall from an IPO of the company.
As per a Twitter thread by Cruise founder Kyle Vogt, an IPO is not imminent for the company.
Why not just go public? It’s a major distraction, especially right now. Cruise just launched a driverless ride hail service in SF, and we want 100% of our energy focused on scaling up and delighting our customers.
— Kyle Vogt (@kvogt) March 18, 2022
It has been an interesting couple of months at Cruise.
In December, Cruise CEO Dan Ammann was let go from the company by GM CEO and Chair Mary Berra.
The split was due to a disagreement in strategy, including when to take the company private according to reporting at the time.
GM referred comments on the purchase to SoftBank. Softbank declined to comment on the situation.