Volvo Cars has announced oplans to raise nearly $A4 billion in an Initial Public Offering (IPO) in an effort to accelerate its switch to selling electric vehicles only by 2030.
Volvo expects to raise gross proceeds of approximately SEK25 billion (around $A4 billion) in the IPO, which could value the company above $US30 billion, according to people familiar with the matter speaking to the Financial Times.
Further, these same people believe that around $US10 billion of that potential valuation could be attributed to Volvo’s nearly 50% stake in Polestar, the EV brand jointly owned between Volvo and its Chinese owner Geely.
The move follows Polestar’s own announcement of late-September that it will go public through yet another merger with an American Special Purpose Acquisition Company (SPAC) on the American Nasdaq.
“Today is an important milestone for our company with the announcement that we intend to list Volvo Cars on Nasdaq Stockholm,” said Håkan Samuelsson, CEO of Volvo Cars.
“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.”
Amidst Volvo’s “mid-decade ambitions” are the goal of selling 1.2 million cars a year, 50% of which will be fully electric. Volvo also aims to reduce CO2 emissions per car by 40% between 2018 and 2025.
As a listed company, Volvo hopes to enable global institutional and retail investors the opportunity to take part in and benefit from the next phase of the company’s transformation.
Geely Sweden, the wholly owned subsidiary of Zhejiang Geely Holding Co Ltd. which acquired Volvo Cars in 2010, will retain the largest share of ownership. Current institutional investors AMF and Folksam will remain as shareholders thanks to their existing 2.2% in preference shares.
