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GM Ponders Separate Stock for Cruise Automation Unit
General Motors Co. has launched an internal discussion that could lead to spinning off the company’s 2-year-old Cruise Automation unit in a few years, sources tell Bloomberg News.
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General Motors Co. has launched an internal discussion that could lead to spinning off the company’s 2-year-old Cruise Automation unit in a few years, sources tell Bloomberg News.
But the sources say GM is more likely to retain the business and either give it a separate tracking stock or offer less than 20% of the unit’s equity. Either of those options would enable GM to retain control of the high-performing tech unit, while giving the business a way to attract and reward talent.
GM has offered trading stocks before. When the company acquired Electronic Data Systems Inc. in 1984, it created special GME shares. The move enabled GM to decouple EDS and its value from the carmaker’s own stock performance.
Bloomberg says no decision to alter Cruise Automation’s financial structure is likely until the fledgling autonomous vehicle and ride-hailing business moves beyond prototypes and concepts and begins offering actual products.
GM acquired Cruise Automation and its 50 employees in 2016 for about $1 billion in cash and management incentives. Last month Japan’s SoftBank Vision Fund agreed to invest $2.3 billion in the company, based on a market evaluation of $11.5 billion.
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