Volvo Cars, the Swedish carmaker owned by China’s Zhejiang Geely Holding, said Monday it would file for an initial public offering and list on the Nasdaq Stockholm exchange, in a transaction that’s expected to raise up to $2.9 billion (25 billion Swedish kroner).
The deal could value the automaker at up to $25 billion, the Wall Street Journal reported, citing sources familiar with the matter.
While Geely will sell a certain number of its shares, according to a press release, Volvo said the Chinese company will remain its largest shareholder following the deal; its Swedish institutional shareholders, Folksam and AMF, will also remain. In a statement, the Swedish automaker added that its relationship with Geely – and other companies in Geely’s ecosystem – “allows it to benefit from sharing existing and future technology, coordination of procurement and economies of scale to achieve synergies, competitiveness and deliver long-term value.”
Volvo made a voluntary commitment to shift its entire line-up to electric by 2030, with 50% of its sales volume to be electric by the middle of the decade. The proceeds from the IPO will go toward accelerating its transition to full electric “even in case of a weakening market environment,” the automaker said.
The news reinforces just how far Volvo has come over the past 11 years, after Ford Motor sold it at a major loss to Geely for $1.8 billion in 2010. (Ford had purchased the Swedish automaker for $6.5 billion in 1999.) Since its purchase by Geely, Volvo underwent a major expansion, building two vehicle assembly facilities in China and a factory in South Carolina. In June, Volvo said it would invest another $118 million into its South Carolina plant.
The turnaround is reflected in its sales. On Friday, Volvo reported a 17.6% increase in sales for the first nine months of this year, compared to the same period in 2020.
Volvo’s intention to go public comes on the heels of news from EV maker Polestar that it would merge with a special purpose acquisition company in a deal valued at $20 billion. Polestar, an arm of Volvo Car’s electric brands, is also owned by Geely. It seems likely that the timing is not a coincidence; according to WSJ reporting, the Polestar SPAC assigned a value of around $10 billion to Volvo’s stake in the company, paving the way for Volvo’s IPO.