Volvo Cars, the Swedish auto maker owned by Zhejiang Geely Holding Group Co. of China, is completing plans for an initial public offering and is set to announce details of the listing as early as Monday, in a deal that could value the car maker at as much as $25 billion, according to people familiar with the matter.
A listing, if it goes ahead, would represent one of the car industry’s most dramatic turnarounds.
Ford Motor Co.
, weakened by the global financial crisis, sold the Swedish company to Geely for $1.8 billion in 2010.
Volvo has long capitalized on a brand recognized for safety, but at the time of its sale, its product lineup had failed to excite car buyers. Geely bankrolled Volvo’s recovery over the next decade, opening China as a market for the brand and providing financing to help the company revamp its model offerings.
Today, Volvo is profitable, with a road map for electric-model rollouts that is ahead of some competitors. Its brand is back in fashion in the U.S. and elsewhere. It now competes with German premium brands, including BMW maker
,
Volkswagen AG’s
Audi brand and
Daimler AG’s
Mercedes-Benz.
For the first half of this year, Volvo reported a 41% increase in sales over the same period last year, to 380,757 vehicles. The company’s sales in the U.S. rose 47% to 63,754 vehicles. Europe remains Volvo’s biggest market.
At a valuation of $25 billion, Volvo would be bigger than European car maker
Renault SA,
which has a market value of a little more than $10 billion. That is despite Volvo selling a fraction of the cars Renault sells each year. Volvo’s size, though, would pale against the world’s biggest car makers, including
General Motors Co.
and Volkswagen, underscoring the competitive challenge the Swedish company faces. Its value would also sharply trail the $767.5 billion market capitalization of electric-vehicle leader
Tesla Inc.
Still, a listing would provide investors another competitor to bet on in an auto-industry race to roll out electric vehicles. Volvo was the first conventional auto maker to begin phasing out internal-combustion engines, ending its production of cars only powered by fossil fuels in 2019. Since then, every new Volvo is either a fully electric or hybrid model.
Most big auto makers have since said that they also will be phasing out conventional engines in new vehicles, by around 2035.
Volvo has floated the idea of a possible listing as far back as 2018, and in May said it was considering an IPO on the Stockholm stock exchange. Such a listing could provide the company a…
Read More: Volvo Cars Is Completing Plans for IPO in Stockholm