Volvo Cars sees a reviving IPO of nearly $3 billion this year | Dao Insights

Volvo Cars sees a reviving IPO of nearly $3 billion this year

On 4 October, Volvo Cars finally announced its plan to file for an IPO in Nasdaq Stockholm this year, intending to raise $2.9 billion. This well-known Swedish manufacturer – after being acquired for 1.8 billion by Geely Holding, a Chinese automotive company – keeps its original business structure. The plan to go public reveals an ambition for more independence from its Chinese mother company, which is expected to boost the company’s value to almost $20 billion.

The CEO of Volvo Cars, Håkan Samuelsson, believes that “The IPO will draw global investors to us, who will, together with us, make the company a major player at the forefront of premium and smart electric vehicle markets”. Analysts agree that this listing will allow Volvo to diversify its shareholders and become even more independent from Chinese investors.

This move is in line with a deal struck with Geely Holding in July – buying out Geely’s stake in the two companies’ joint ventures in China so that Volvo Cars can take full ownership of its manufacturing plants and sales operations in the country. Assumably, in ten years, this Swedish automaker will unify global operations, and become “the first foreign carmaker, who fully controls its joint ventures in China”, said Håkan.

For Geely Holding, this IPO will serve as a double-edged sword. It can bring a huge amount of money within a short time and alleviate the financial burden from this relatively young Chinese company. However, it may also weaken Geely’s influence on this reviving subsidiary – Volvo Cars.

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