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Volvo Cars, the Swedish automaker owned by Chinese company Zhejiang Geely Holding Group Co., is completing plans for an initial public offering and is expected to announce listing details as early as Monday, in a deal that could value the automaker to up to $ 25 billion, according to people familiar with the matter.
Volvo had pitched the idea of a possible listing as early as 2018 and said in May that it was considering an IPO on the Stockholm Stock Exchange. Such a listing, assuming it materializes, would provide the company with a larger shareholder base and greater independence from its Chinese investors. It was not clear what share Geely plans to sell.
Volvo announcement would represent a milestone in what has at times been a difficult turnaround effort since Ford Motor Co.
sold the company to Geely for $ 1.8 billion in 2010. It has long capitalized on a brand known for its safety, but at the time of its sale its product line had failed to thrill car buyers .
Geely funded Volvo’s takeover over the next decade, opening up China as a market for the brand and providing funding to help the company revamp its model offerings. Today, Volvo is profitable, with a roadmap for the deployment of electric models ahead of some competitors. It now competes with the range of German premium brands, including Bayerische Motoren Werke AG
, Volkswagen AG
Audi and Mercedes-Benz brand of Daimler AG.
Last week, Polestar, a Swedish electric vehicle maker jointly owned by Volvo, Geely and others, announced plans to merge with a specialist acquisition company and register in New York as part of a deal that would value the Swedish electric vehicle maker at around $ 20 billion.
Volvo Cars said last month it plans to own almost 50% of the combined company after Polestar’s merger with Gores Guggenheim is finalized. Inc.
The Polestar deal allowed Volvo to continue its own offering by placing an estimated $ 10 billion worth of Volvo’s stake, according to some people familiar with Volvo’s 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 not to merge Volvo with Geely Auto Group, raising hopes that the company would pursue separate registration and greater independence from Geely Holding. Geely has previously indicated that he will likely remain a significant shareholder after any offer.
“Volvo Cars is uniquely positioned to ensure continued growth and harness the full potential of electrification and the provision of safe autonomous driving functions,” said Eric Li, chairman of Geely Holding, in May.
Write to Ben Dummett at [email protected] and William Boston at [email protected]
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