Daily Management Review

WSJ: Volvo could be valued at $25B at Stockholm IPO


Swedish carmaker Volvo Cars could be valued at $25bn in an initial public offering on the Stockholm Stock Exchange.

Tony Webster
Tony Webster
Swedish automaker Volvo Cars (owned by China's Zhejiang Geely Holding Group) is preparing to announce details of its initial public offering on the Stockholm Stock Exchange on Monday, October 4. The company may be valued at up to $25 billion, writes The Wall Street Journal (WSJ) citing sources familiar with the company's plans.

Volvo had been thinking about going public as early as 2018, and in the spring of 2021 said it was considering an IPO on the Stockholm Stock Exchange. Such a listing could provide the company with a broader shareholder base and greater independence from Chinese investors. Reuters reported in September that Volvo was in talks to float its shares in the coming weeks before the end of September. At the time, experts said the carmaker could be valued at $16-20 billion in an IPO. 

It is not yet clear how much of the stake Geely plans to sell when it goes public, but the company has previously indicated it is likely to remain a major shareholder after any offer. A decision on public disclosure of listing details may be delayed, but interlocutors familiar with the company's plans said the listing itself would take place. China's Geely Holding bought the carmaker from US-based Ford Motor for $1.8bn in 2010. 

At a valuation of $25 billion, Volvo's market capitalisation would put it ahead of European carmaker Renault at just over $10 billion, but it would remain far behind major global automakers such as General Motors and Volkswagen as well as electric car leader Tesla ($767.5 billion). Geely financed Volvo's recovery during the decade, opening up China as a market for the brand and investing ($11bn) in updating the company's model range, early transition to electric cars and building factories that helped Volvo capitalise on Chinese interest in Western cars.

source: wsj.com