(RTTNews) – Toyota Motor Corp.’s (TM) subsidiary Woven Planet Holdings Inc. has agreed to acquire ride-hailing service Lyft Inc.’s (LYFT) self-driving vehicle division, Level 5, for $550 million in cash.
Lyft will receive $200 million in upfront payment and the rest $350 million in payments over a five-year period. Lyft also expects the deal to remove $100 million of operating expenses from its R&D division. The transaction is expected to close in the third quarter of 2021.
“Assuming the transaction closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year,” Lyft Co-Founder and President John Zimmer said.
The deal also includes multi-year non-exclusive commercial agreements between Lyft and Woven Planet. About 300 people from Lyft Level 5 will be integrated into Woven Planet. The Level 5 team will continue to operate out of its office in Palo Alto, California.
LYFT closed Monday’s trading at $63.06, down $0.64 or 1.00%, on the Nasdaq. The stock, however, gained $1.49 or 2.36%, in the after-hours trade.