China Geely Holdings Reconsiders Volvo Cars IPO After 3 Years

Stockholm and Amsterdam Listings Expected as Early as This Year

[Image source= AP Yonhap News]

[Asia Economy Reporter Park Byung-hee] Geely Holding, the parent company of China's Geely Automobile, is reportedly reconsidering the initial public offering (IPO) of Volvo Cars for the first time in three years, according to Bloomberg News citing sources on the 31st of last month (local time).

According to the sources, Geely Holding recently discussed with advisory firms the possibility of IPOing Volvo Cars on the Stockholm or Amsterdam stock exchanges as early as this year.

Recently, automakers have been seeking funding through various methods. This is because the electric vehicle market is rapidly growing, making expanded investment in the EV sector urgent. Geely Holding's consideration of a Volvo Cars IPO is interpreted as a move to prepare for the electric vehicle era. Volvo recently declared its transformation into an electric vehicle company, stating it will sell only electric vehicles from 2030 onward.

Previously, Geely Holding pursued an IPO for Volvo Cars in 2018. At that time, Geely Holding expected Volvo Cars' market value to reach up to $30 billion and pushed for the IPO, but withdrew it when investors showed hesitation. Bloomberg cited sources saying that Volvo's current market value may be around $20 billion.

In February last year, Geely Holding announced plans to merge Geely Automobile and Volvo Cars, but this plan was also withdrawn in February this year, just one year later. After withdrawing the merger plan, Geely Holding decided instead to combine the powertrain divisions of the two companies to establish a new company and strengthen technological cooperation.

Geely Holding acquired Volvo Cars from the U.S. Ford Motor Company in 2010 by investing $1.8 billion. Since then, Volvo Cars has continued independent management and sustained growth. Last year, Volvo Cars sold over 660,000 vehicles. Its largest sales market is China, followed by the United States, Sweden, and Germany.

Polestar, the electric vehicle company jointly established by Geely and Volvo, is also expected to be listed on the U.S. or Hong Kong stock markets as early as this year.