Honda buys stake in GM Cruise self-driving unit, to invest $2 billion

[DonViejo]

Source: Reuters




OCTOBER 3, 2018 / 8:27 AM / UPDATED 28 MINUTES AGO

Honda buys stake in GM Cruise self-driving unit, to invest $2 billion

Arunima Banerjee, Nick Carey

(Reuters) - Honda Motor Co Ltd (7267.T) will invest $2 billion and take a 5.7 percent stake in General Motors Co’s (GM.N) Cruise self-driving vehicle unit, extending cooperation between the two automakers in a technology that has enormous costs and risk but no market-ready products.

Honda, which has lagged behind many of its rivals in developing self-driving vehicles, is paying $750 million upfront for the minority stake in Cruise and will invest another $2 billion over 12 years, the companies said on Wednesday. Honda, GM and Cruise will jointly develop self-driving vehicles for deployment in ride services fleets around the world. GM shares were up 3.5 percent in opening trade.

In May, Japan’s SoftBank Group (9984.T) said it would buy a 19.6 percent stake in Cruise for $2.25 billion.

Honda’s investment values Cruise at $14.6 billion - about a third of GM’s market cap, $48.5 billion. GM acquired the San Francisco-based startup in March 2016 for a reported $1 billion.



Read more: https://www.reuters.com/article/us-gm-autonomous/honda-buys-stake-in-gm-cruise-self-driving-unit-to-invest-2-billion-idUSKCN1MD1GW

[bucolic_frolic]

1. Hope is goes better than

Waymo, Uber, Tesla ... Honda remains a relatively small car company and can ill afford missteps in the $2 billion order