Lyft Rebuffs Acquisition Approach from GM

General Motors in recent weeks told Lyft it was interested in acquiring the company, according to a person briefed on the situation. After soliciting other potential strategic acquirers, Lyft rebuffed GM’s approach and decided to raise a new funding round instead, according to two people.

GM mentioned a price it was willing to pay but that amount couldn’t be learned, and it’s unclear who initiated the conversation. [Update: The price each company had in mind is here.] GM paid $500 million for a 9% stake in Lyft at the start of the year, valuing the company at $5.5 billion. GM’s president sits on Lyft’s board of directors. The bid signals GM’s seriousness about increasing its investment in ride-sharing, as Lyft would likely require billions of dollars in further investment. Lyft trails Uber by a wide margin overall in terms of market share in the U.S.

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But traditional car makers are grappling with the rise of self-driving car technology, bringing in a range of new entrants such as Tesla and Apple. GM earlier this year said it paid about $600 million to buy Cruise Automation, a self-driving car startup based in the Bay Area, and the companies are working with Lyft toward developing robo taxis. Uber has its own self-driving car program but hasn’t yet partnered with a car maker. Google, Apple and China-based Baidu also have programs, though they don’t have an obvious and immediate business model for the technology the way Uber and Lyft do, assuming the ride-sharing firms can buy access to autonomous vehicles. 

This article has been updated with more information.

Michael Duda and Jay Ramachandran commented on this article.
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