Geely may restart Volvo Cars IPO, valued at US$20 billion
According to foreign media reports, people familiar with the matter disclosed that Zhejiang Geely Holding Group is considering restarting its Volvo Car’s initial public offering (IPO) plan, which may be valued at around US$20 billion.
According to people familiar with the matter, Geely Holdings, which is owned by a small number of people, has been in discussions with potential advisers and plans to sell Volvo Car shares as early as this year. It is reported that the company is considering listing in Stockholm and Amsterdam. Due to the confidentiality of the information, these individuals requested to remain anonymous.
Automakers have been looking for ways to fund the huge investments required for the huge shift to electric vehicles. In February of this year, Geely Holding Group abandoned its plan to merge Volvo Cars with its listed company Geely Automobile Holdings (Geely Automobile Holdings). Instead, it decided to merge the power system businesses of the two companies into a new company, and in terms of technology development. cooperating.
(Image source: Volvo Cars)
People familiar with the matter said that the relevant negotiations are still at an early stage, and details such as potential valuations may change. A representative of Geely Holding Group declined to comment. A Volvo Car spokesperson said that the agreement reached in February allows the two companies to explore their respective capital market options to achieve shareholder value.
The spokesperson revealed that Volvo Cars will consider a variety of capital market options, including possible IPO and stock market listing plans. So far, the company has not made a decision. If required, appropriate regulatory disclosures will be made at the appropriate time.
Geely Holding sought an IPO of Volvo Cars in 2018. People familiar with the matter said at the time that the company shelved the plan because investors were dissatisfied with its $30 billion valuation.
According to data compiled by Bloomberg, global companies have raised $220 billion through IPOs this year. Compared with the first quarter of 2020, this number has increased by nearly 6 times.
In 2010, Geely Holdings acquired Volvo Cars from Ford for US$1.8 billion. The Swedish brand is thriving under the management of the new owner and has maintained a large degree of independence in global operations. In 2020, Volvo Cars will sell more than 660,000 vehicles worldwide. China is its largest market, followed by the United States, Sweden and Germany.
Volvo Car’s initial public offering will increase Geely’s founder and chairman Li Shufu’s connections and partnerships in the global automotive manufacturing sector. Li Shufu is the largest shareholder of Daimler Group and the second largest shareholder of Swedish truck manufacturer Volvo Group, and controls sports car manufacturer Lotus Motors and London's iconic black taxi.
In this year alone, Li Shufu has established contacts with search engine giant Baidu, foundry giant Foxconn Technology Group and Tencent Holdings to keep up with the accelerated shift to electrification of automobiles and more software.
Volvo Cars set an ambitious goal this month to only sell electric vehicles from 2030, a commitment that goes further than the plans announced by Volkswagen Group or BMW.
Geely has also been investing resources in electric vehicles. Geely and Volvo’s joint venture brand Lynk u0026 Co’s China-made 01 SUV will begin shipping to Europe in April. In addition, Geely also controls electric car maker Polestar, which is exploring options for listing in the United States or Hong Kong as early as this year.
