Earlier this month, General Motors acquired Cruise Automation — a two year-old startup that has developed an autonomous driving device. The instrument allows drivers to take their car onto the highway, then transfer control of the accelerator, brakes and steering by pushing a button. Neither General Motors nor Cruise Automation disclosed the amount of the acquisition.
However, recent reports — including those from Fortune and the Chicago Tribune — state that The General paid over $1 billion in cash and stock for the San Francisco-based startup.
“It’s giving us the software we need to go to the next level of autonomous driving,” said Alan Batey, President of GM North America, on Wednesday at the the New York Automotive Summit hosted by Bank of America Merrill Lynch. “I can’t give you details beyond that”, he concluded.
The GM Authority Take
General Motors had $15.2 billion in cash & cash equivalents on hand at the end of fourth quarter of 2015 (see GM Q4 2015 earnings). As such, a billion dollars to acquire Cruise Automation is roughly 6 percent of its total cash/cash equivalents holdings. Even so, the automaker clearly sees it as a worthwhile investment to gain an advantage in the rapidly-developing autonomous vehicle space. The purchase is GM’s largest since its 2009 bankruptcy.
To find out the actual amount paid for the acquisition, we’ll have to wait either for GM’s official filing with the Securities and Exchange Commission (SEC) or for its Q1 2016 earnings report.