STOCKHOLM -- Volvo Cars intends to launch an initial public offering and list on the Nasdaq Stockholm stock exchange, in what would be one of Europe's biggest initial public offerings this year, the automaker said in a statement.
In 2018, Volvo and Geely postponed earlier plans to float shares in the Swedish automaker, due to trade tensions and a downturn in automotive stocks.
"The proposed IPO is expected to consist of the issuance of new shares by Volvo Cars to raise gross proceeds of approximately SEK 25 billion ($2.9 billion) and a potential partial sale of shares by Volvo Cars' main shareholder," the Sweden-based automaker said on Monday.
The offering will be divided into two parts:
- To the general public in Sweden, Denmark, Finland and Norway
- To institutional investors in Sweden and abroad
It added that the first day of trading was expected to be in 2021 and that Geely would remain it biggest shareholder.
"The decision to proceed with an IPO will help strengthen our brand and accelerate our transformation strategy -- toward full electrification, direct consumer relationships and the next level of safety. This will position the company to deliver continuous growing volumes, revenues and profitability," Volvo CEO Hakan Samuelsson said in the statement.
Sources told Reuters last month that China's Geely Holding was in advanced discussions with banks to list the Swedish company in the coming weeks, aiming for a valuation of about $20 billion.
Volvo had previously said it was considering listing on the Stockholm stock exchange in the second half of 2021.
Volvo subsidiary Polestar last week announced it had agreed to go public through a merger with blank-check firm Gores Guggenheim at an enterprise value of $20 billion.
Volvo used the announcement of the IPO to reiterated its mid-decade goals, which include:
- Global sales of 1.2 million cars a year by 2025, up from its all-time high of 705,452 in 2019
- EBIT margin of 8 to 10 percent
- 40 percent reduction of CO2 emissions per car between 2018 and 2025
- 50 percent of sales to be full-electric cars
- 50 percent of software development done in-house
- 50 percent of sales conducted online.
Volvo's current Swedish institutional shareholders, AMF and Folksam, intend to keep their combined 2.2 percent stake in the automaker through preference shares following completion of the IPO.
