Volvo Cars plans $4.5bn stock market flotation

By Tristan Shale-Hester

Volvo Cars has unveiled plans for a $4.5bn stock market flotation this year after possible investors signalled that it would reach the $30bn valuation wanted by parent company Geely.

The marque’s primary listing, which has a sterling equivalent of some £3.5bn, will be in Stockholm, while a second listing is planned for an Asian financial centre – most likely Hong Kong – according to a source close to the company. The valuation is equivalent to some £23.6bn.

It has been reported that the flotation could push Volvo Cars’ value up to as much as $40bn (circa £31.5bn).

Volvo Cars was bought by Geely from Ford Motors for $1.8bn (circa £1.4bn) in 2010.

The Financial Times reported a source saying: “Initial feedback from global investors is in line with Volvo’s valuation expectations.” The paper also suggested that floating 15 per cent of the firm in Sweden would raise the equivalent of £3.5bn, making the initial public offering the largest on the Swedish stock exchange since 2000, when telecoms group Telia floated.

(Volvo)

Volvo Cars’ flotation has been on the cards for a while. As far back as 2016 it took a major step towards it by raising 5bn krona – the equivalent of some £483m – via an issue of preference shares to institutional investors in Sweden, while in May this year there was speculation that a sale on the stock market was imminent, with investor opinion as to its value ranging between $15bn (circa £11.8bn) and $30bn (circa £23.6bn), although Volvo itself was understood to be after $40bn.

The news of the flotation comes as it was revealed that truck-making division Volvo AB, which is already listed, was poised to raise its market value by some 20 per cent over the next year.