Volvo Cars Is Completing Plans for IPO in Stockholm
Volvo Cars, the Swedish auto maker owned by Chinaâs Zhejiang Geely Holding Group Co., is completing plans for an initial public offering and is set to announce details of the listing as early as Monday, in a deal that could value the car maker at as much as $25 billion, according to people familiar with the matter.
Volvo had floated the idea of a possible listing as far back as 2018 and in May said it was considering an IPO on the Stockholm stock exchange. Such a listing, assuming it proceeds, would provide the company with a broader shareholder base and greater independence from its Chinese investors. It wasnât clear how big a stake Geely plans to sell.
A listing for Volvo would represent a milestone in what has been at times a rocky turnaround effort since
Ford Motor Co.
sold the company to Geely for $1.8 billion in 2010. It has long capitalized on a brand recognized for safety, but at the time of its sale, its product lineup had failed to excite car buyers.
Geely bankrolled Volvoâs recovery over the next decade, opening China as a market for the brand and providing financing to help the company revamp its model offerings. Today, Volvo is profitable, with a road map for electric-model rollouts that is ahead of some competitors. It now competes with Germanyâs suite of premium brands, including
Bayerische Motoren Werke AG
Audi brand and Daimler AGâs Mercedes-Benz.
Last week, Polestar, a Swedish electric-vehicle maker jointly owned by Volvo, Geely and others, announced plans to merge with a special-purpose acquisition company and list in New York in a deal that would value the Swedish electric-vehicle maker at roughly $20 billion.
Volvo Cars said last month that it expected to own close to 50% of the combined company after completion of Polestarâs merger with
Gores Guggenheim Inc.
The Polestar deal generated a pathway for Volvo to pursue its own offering by assigning a value of about $10 billion to Volvoâs stake, according to some of the people familiar with Volvoâs listing plans.
In September, Reuters reported that Volvo was in talks to list its shares in the coming weeks.
Earlier this year, Volvo and Geely decided against merging Volvo with Geely Auto Group, raising expectations that the company would pursue a separate listing and greater independence from Geely Holding. Geely has previously indicated it would likely remain a major shareholder after any offering.
âVolvo Cars is especially well-positioned to deliver continued growth and harness the full potential of electrification and the delivery of safe autonomous-drive functions,â
chairman of Geely Holding, said in May.
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