BEIJING, July 10 (Xinhua) — Amazon plans to set up at least $100 million in stock incentives to retain more than 900 employees at self-driving car start-up Zoox, which it launched last month with a takeover bid for Zoox and is likely to abandon the deal if it does not retain most of its key employees,media reported.
Amazon is trying to develop self-driving technology, and on June 26th the tech giant announced it would buy Zoox, which aims to build its own self-driving cars rather than add self-driving features to existing cars. Amazon will buy Zoox for $1.3 billion in cash, and the two sides hope to complete the acquisition by September.
Zoox is valued at $3.2 billion in 2018, according to PitchBook. According to Amazon’s transaction documents, Zoox will spend more than $30 million a month in early 2020 and is expected to run out of cash by July. The agreement, signed in June, allows Amazon to lend Zoox $30m until the deal is completed.
Before the agreement was signed, another company also made an offer for Zoox, which was invested in Cruise, which was invested by General Motors, Honda Motor Co. and SoftBank, according to the sources. Zoox did not respond to the offer. On June 4th it was reported that Cruise had sent offers to several Zoox engineers.
On June 30th it was reported that two Zoox engineers had left to join Alphabet’s self-driving company Waymo. In the Amazon and Zoox deal documents, the two engineers were described as “key employees”. Under the agreement, Amazon’s acquisition of Zoox is conditional on the remaining of at least 19 of all employees on the first list and the second batch. Amazon plans to offer work contracts to other employees in three batches and wants to retain 90 percent of the first two and 88 percent of the third.
Jesse Levinson, co-founder of Zoox, will receive 40 per cent of the deal’s value three years after it was completed. Levinson owns 49 million common shares of Zoox, about 37 percent of which are held. Zoox CEO Aicha Evans received about $3.4 million in cash, according to trading documents.
Neither Amazon nor Zoox immediately responded to requests for comment.