SoftBank Group Corp. has scrapped a planned $16 billion investment in shared-office space provider WeWork Cos., opting instead for a smaller deal of about $2 billion amid market turbulence and opposition from investment partners, according to people familiar with the matter.
The two companies could announce the smaller deal as soon as Tuesday, valuing WeWork at about $36 billion, with half of the money going to buy shares from existing investors, the people said. SoftBank 9984, +1.86% is already a major investor in WeWork having committed more than $8 billion, partly from the Japanese company’s giant tech-investment fund.
The earlier plan to acquire a majority stake in WeWork would have been one of the largest ever investments in a private tech startup, calling for SoftBank to spend $10 billion to buy out existing investors and provide an additional $6 billion in new capital over the next three years, these people said.
Executives at both companies had been in advanced discussions, and as of late last month they had planned to announce the landmark deal Tuesday, these people said. The exact reason for the pared-back investment is unclear, though the deal faced significant hurdles.
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