Volvo Cars Announces Plans for an IPO, Aims to Raise $2.9 Billion
【Summary】Sweden-based automaker Volvo Cars, which is owned by Chinese automaker Zhejiang Geely Holding Group Co. (“Geely”), on Monday announced its intention to launch an Initial Public Offering (IPO) and to list its class B shares on Nasdaq Stockholm. For the proposed IPO, Volvo Cars is expected to issue new shares to raise gross proceeds of approximately SEK 25 billion (US$2.8 billion).
Swedish automaker Volvo Cars, which is owned by Chinese automaker Zhejiang Geely Holding Group Co. ("Geely"), on Monday announced its intention to launch an Initial Public Offering (IPO) and to list its class B shares on Nasdaq Stockholm.
For the proposed IPO, Volvo Cars is expected to issue new shares to raise gross proceeds of approximately SEK 25 billion (US$2.8 billion) and a potential partial sale of shares by Volvo Cars' main shareholder.
Current institutional shareholders AMF and Stockholm-based insurance company Folksam intend to remain Volvo Cars' shareholders following completion of its planned IPO.
The two companies currently hold 2.2% of the shares in Volvo Cars through preference shares. Following completion of the IPO, AMF and Folksam will remain shareholders in Volvo Cars through listed shares.
Volvo Cars is one of the world's fastest growing premium automotive companies in terms of both units sales and revenue. The company was founded in 1927 and is headquartered in Gothenburg, Sweden.
In July, Volvo Cars struck a deal to buy out parent company Geely from its joint ventures in China, in a move that could make an IPO from the automaker more attractive to investors.
The deal would give Volvo Cars full ownership of its factories in Chengdu and Daqing, as well as a research and development facility in Shanghai.
Volvo and its parent Geely also jointly operate new electric-performance vehicle brand Polestar, which is emerging as a challenger to Tesla and others EV startups. The company's first mass-market EV named the Polestar 2 is currently on sale.
The Polestar 2 is being built at Geely's factory in Luqiao, China. It's also the world's first vehicle to come with Google's new "Android Automotive OS" built in.
Also in July, Volvo Cars also said it was acquiring additional shares in Polestar. The additional shares in Polestar will increase Volvo Cars' stake back to 49.5%.
Volvo Cars believes that its unique structure and focused strategy makes it one of the fastest transformers in the global automotive industry. The automaker plans to phase out the production of gas-powered vehicles and become a fully-electric automaker by the end of the decade.
Volvo Cars' Board of Directors and its main shareholder, Geely Sweden Holdings AB (Geely Sweden), have agreed to apply for a listing of the company's shares on Nasdaq Stockholm in order to gain access to the Swedish and international capital markets, according to the company's press release.
As a listed company upon completion of the IPO, Volvo Cars will enable global institutional and retail investors to participate in its growth. Geely Sweden, a wholly-owned subsidiary of Zhejiang Geely Holding Co Ltd. that acquired Volvo Cars in 2010 from U.S. automaker Ford Motor Co., intends to remain the company's largest shareholder. Zeely will also help Volvo Cars gain access to the Chinese market, which is the world's biggest auto market.
"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 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."
Volvo Cars announced that full terms and conditions for the proposed IPO will be published in a prospectus ahead of the planned listing. The company said it will make further announcements when the prospectus is made available.
The listing committee of Nasdaq Stockholm has determined that Volvo Cars meets the applicable listing requirements, provided that customary terms and conditions are satisfied.
The first day of trading is expected to be in 2021.
"We have supported the transformation and growth of this iconic Swedish brand during a period of unprecedented change in our industry," said Eric Li, Chairperson of Volvo Cars' Board of Directors. 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 also has its own plans to go public. The electric brand of Volvo Cars and Geely announced an agreement last week to merge with Gores Guggenheim, Inc., a special purpose acquisition company ("SPAC") formed by affiliates of The Gores Group and Guggenheim Capital, LLC.
Upon closing of the proposed business combination, the combined new company will be named "Polestar Automotive Holding UK Limited." Polestar shares will be listed on the NASDAQ in the U.S. under the ticker symbol "PSNY."
Geely's purchase of Volvo Cars from Ford Motor Co in 2010 was the largest acquisition of a foreign car maker by a Chinese automaker at the time. It was intended to help extend the automaker's reach outside of China.
Lucid’s New ‘Stealth Look’ Appearance Package for the Electric Air Sedan Compliments its High Performance DNA
Toyota’s Redesigned Prius May Get More Drivers Behind the Wheel of a Hybrid Vehicle
Toyota to Collaborate With Texas-based Utility Provider Oncor to Accelerate a Vehicle-to-Grid EV Charging Ecosystem
Stellantis to Idle its Illinois Assembly Plant Indefinitely, Citing the High Costs of Electric Vehicles
Apple Delays its Long Rumored Electric ‘Apple Car’ Until 2026, According to Sources
The World’s First Level-4 Automated Parking Feature Developed by Mercedes-Benz and Bosch is Approved for Commercial Use
Hyundai Motor Group Signs MoU with SK On Co. to Secure Batteries for EVs Built in the U.S.
Tesla May Build its Next Factory in South Korea, According to the Country’s Presidential Office
- Volkswagen CEO Believes It Will Overtake Tesla in EV Sales by 2025
- Mazda Outlines Plans to Invest $10.6 Billion in Electric and Hybrid Vehicle Development Through 2030
- EV Startup VinFast is Offering 3 Years of Free EV Charging and Advanced Driver Assist System for Customers That Reserve a Vehicle Through Sept 30
- Nexar Releases its ‘Driver Behavioral Map Data’ That Can Help Autonomous Vehicles Operate More Like Human Drivers
- LiDAR developer Luminar Technologies Hires Ex Apple, Tesla and Nvidia Execs as it Prepares for Growth
- General Motors Announces Two Major Long-Term Supply Agreements for Enough Lithium and Cathode Material to Build 5 Million EVs
- Volvo’s Brand Polestar Confirms That the Polestar 6 Electric Roadster Will Enter Production and Launch in 2026
- Solar-Electric Car Developer Lightyear Announces Technical Partnership with Hypercar Manufacturer Koenigsegg
- Here’s How Waymo Uses Hyper-Local Weather Data to Improve the Capabilities of its Self-Driving Vehicles
- Intel’s Self-Driving Car Unit Mobileye Postpones its Planned U.S. IPO That Could Value the Company up to $50 Billion