Volvo Cars announces IPO that may value it at $30bn

Volvo Cars CEO Håkan Samuelsson

Volvo Cars has announced its intention to launch an initial public offering (IPO) and to list its class B shares on Nasdaq Stockholm, with some analysts saying the move could value Volvo Cars above $30 billion.

Roughly $10 billion of the $30 billion valuation is attributed by the analysts to the car company’s near 50% stake in electric car maker Polestar.

Gothenburg-based Volvo Cars said it intends to raise 25 billion Swedish crowns ($2.9 billion) by selling new shares.

Volvo Cars has been owned by China’s Zhejiang Geely Holding since 2010. After the listing, Geely Holding intends to remain the company’s largest shareholder.

“The proposed IPO is expected to consist of the issuance of new shares by Volvo Cars to raise gross proceeds of approximately SEK 25 billion and a potential partial sale of shares by Volvo Cars’ main shareholder,” said Volvo Cars.

“In addition, Volvo Cars’ current Swedish institutional shareholders AMF and Folksam intend to remain as shareholders following completion of the IPO.”

Volvo Cars CEO Håkan Samuelsson said: “Today is an important milestone for our company with the announcement that we intend to list Volvo Cars on Nasdaq Stockholm.

“The proposed IPO marks a new chapter for Volvo Cars, and we invite Swedish and international investors to participate in our future growth and value-creation.

“The decision to proceed with an IPO will help strengthen our brand and accelerate our transformation strategy – towards full electrification, direct consumer relationships and the next level of safety.

“This will position the company to deliver continuous growing volumes, revenues and profitability.”

Eric Li, chairperson of Volvo Cars’ board of directors and ultimate owner of the main shareholder, says: “We have supported the transformation and growth of this iconic Swedish brand during a period of unprecedented change in our industry.

“Over the past decade, Volvo Cars has turned itself into one of the world’s fastest-growing carmakers.

“We will continue to support Volvo Cars as a majority shareholder in this ongoing global success story.”

Polestar, owned by Geely and Volvo, last week said it will go public by merging with a US-listed special purpose acquisition company (SPAC) backed by billionaire Alec Gores and investment bank Guggenheim Partners at an enterprise value of $20 billion.