SoftBank Acquires WeWork
CBJ – SoftBank Group will acquire WeWork in a deal worth more than $10 billion, resulting in CEO Adam Neumann relinquishing all control.
The deal further illustrates the huge reversal of fortune for the U.S. office-space sharing start-up, as well as its largest shareholder, SoftBank, which will have spent more than $19 billion propping up a company that has a market value of about $8 billion.
SoftBank is seeking to convince investors to participate in the Japanese company’s second Vision Fund, for which they are seeking to raise $108 billion. To stem WeWork’s huge losses, SoftBank will need to reverse its course and find a way to make it profitable, and it won’t be an easy task.
Meanwhile, WeWork CEO Neumann has already managed to secure a $685 million side deal with SoftBank to step down from the board of WeWork’s owner, We Company. However, it’s expected many of WeWork’s employees won’t receive anywhere near the same treatment, with thousands of layoffs quite likely.