Chinese-owned Swedish carmaker, Volvo Cars, is reportedly now finalizing its plans to list its shares in Stockholm. Sources familiar with the matter said the company, which is owned by Zhejiang Geely Holding Group, will be announcing details of its initial public offering within the week.
Since last month, the company has been in advanced talks with several banks for its planning IPO. Goldman Sachs and SEB are reportedly leading the planned transaction. BNP Paribas, HSBC, and Carnegie are reportedly also involved.
Volvo initially planned to float its shares in 2018 but then decided against it citing trade deal tensions and a wider downturn in automotive stocks.
Sources said the IPO could set the company's market valuation at more than $25 billion. If the company does successfully launch its IPO, it could become one of the car industry's largest turnaround. Geely originally bought Volvo from Ford Motor in 2010 for $1.8 billion. Ford sold the car brand as it was recovering from the financial crisis.
When it was sold, Volvo, which had made a reputation of being the industry's "safest" vehicles, had failed to catch up to its European counterparts. At the time, the company's product lineup had failed to attract car buyers outside of its home country.
After Geely acquired the brand, the Chinese company invested hundreds of millions of dollars to help the company return to its former glory. Over the past decade, Volvo had significantly revamped its model offerings. The opening of China's market, which has now made it into the world's second-largest car market, also helped in Volvo's rapid recovery.
As of today, the company is profitable and it now has a clear road map towards its future electrification. Volvo previously announced that it plans to only make fully electric vehicle models by 2030. Outside of China, the brand has also now re-captured the attention of car buyers, particularly in the U.S. and Europe.
For the first half of 2021, Volvo recorded a 41% increase in overall sales - a total of 380,757 vehicles - when compared to the same period last year. In the U.S., the company reported a 47% increase in sales of 63,754 vehicles.
