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London / Hong Kong – Early reactions from investors have earned Volvo Cars high-end estimates of the Zhejiang Geely Holding Group for possible listing, according to sources close to the record
is worth about 12 to 18 billion dollars In early meetings to discuss an initial public offering (IPO), people said, asking not to be named because the proceedings are confidential. Zhejiang Geely and Volvo had discussed worth $ 16-30 billion, told people aware of the case in May
Zhejiang Geely and Volvo representatives declined to comment.
Volvo stays private longer, people say. Zhejiang Geely had asked for a significant premium to multiples ordered by other automakers, including Daimler and BMW, they said.
Chinese owners had the intention to sell shares as early as the autumn in Hong Kong and Sweden, people familiar with the plans said earlier. Zhejiang Geely acquired Volvo in 2010 and renewed its range of vehicles to make it a popular alternative to the pillars of German luxury.
Investors reacted to Volvo's initiatives, such as autonomous driving and electrification. premium to some peers, one of the people said. Volvo was the first global car manufacturer to announce its intention to switch exclusively to electric vehicles (EV) from next year.
Daimler, which has lost about 17% this year, is trading at about 6.13 times earnings, BMW is trading at about six times, according to data compiled by Bloomberg. A valuation of $ 12 billion for Volvo would imply that the automaker be valued at about 7.5 times the operating profit of 2017.
The Swedish unit of Zhejiang Geely owns 99% of Volvo, while a group of Swedish institutional investors holds the remaining 1% According to data compiled by Bloomberg, companies and their shareholders globally have sold securities of a value close to US $ 126 billion so far, compared with US $ 119 billion in the same period in 2017. The Chinese smartphone giant, Xiaomi, has made the largest contribution, raising US $ 4.7 billion after selling shares in China. Lower end of its marketed range.
Bloomberg
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