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Chinese-owned Volvo Cars will announce its long-awaited plans for an initial public offering on Monday, people familiar with the matter said, as the Swedish automaker seeks to capitalize on an increase in premium sales and growth of its all-electric Polestar. fire.
The listing could value Volvo Cars above $ 30 billion, they added, and about $ 10 billion of that figure is attributed to the automaker’s 50 percent stake in Polestar, which will be made public through a special purpose acquisition company with a valuation of $ 20 billion. .
That would leave Volvo Cars’ remaining business, which sold more than 700,000 vehicles in 2019, valued at a low of $ 20 billion, in line with the market value of larger premium competitors BMW and Daimler.
However, a person close to the company said Volvo Cars was unlikely to be worth less than Polestar.
A float would provide great performance for Volvo Car owners Geely, who bought the ailing company for $ 1.8 billion from Ford in 2010.
The Wall Street Journal first reported the timing of the long-awaited Volvo Cars IPO announcement.
Geely abandoned an attempt to float Volvo Cars in 2018 due to fears that a trade war between the US, Europe and China would hurt the company’s valuation. At the time, Geely originally believed it could get a $ 30 billion valuation for the brand.
Volvo Cars CEO Hakan Samuelsson said at the time that “conditions at the moment are not optimal to give investors some advantage.”
The less erratic Biden administration could have given Volvo Cars a more stable window to conduct an IPO, people familiar with the matter speculated.
The company has done well in recent months. It posted its best first-half results in July despite a global semiconductor shortage that has hit the auto industry.
However, it revealed on Monday that September sales had fallen 30 percent year-on-year, largely due to a “component shortage.”
Volvo Cars has one of the most ambitious electrification plans of any major automaker, pledging to sell only electric vehicles by 2030. Rival Daimler, for example, has said it will be ready to go fully electric on the same date “where market conditions allow it. ” .
Volvo Cars has also outlined plans to mimic the sales of start-up EV models by selling cars directly to consumers, rather than through dealerships, eliminating price fluctuations in the process.
Polestar, which parted ways with Volvo Cars four years ago and has the backing of actor Leonardo DiCaprio, said last week that it would be merging with Gores Guggenheim, a Spac backed by billionaire private equity investor Alec Gores and Guggenheim Capital.
The company, which competes with Tesla, said it would expand from the 14 markets it is currently in to 30, with a particular focus on the Asia-Pacific region.