Volvo’s $2.9B stock offering marks key test in EV shift

Volvo Autos is seeking to elevate 25 billion kronor ($two.nine billion) in a Stockholm first public giving in a exam for automakers amid the sector’s changeover to electric powered cars.

The deal values Volvo Autos at as a lot as $23 billion — 11 decades just after the Chinese organization acquired the small business from Ford Motor Co. for $1.8 billion. The IPO is established to be Europe’s largest since January, in accordance to details compiled by Bloomberg.

The giving of as a lot as 21 % of Volvo Autos operates by means of Oct. 27, and the shares are established to start off trading in Stockholm on Oct. 28.

Proceeds from the share sale will support Volvo shift to a immediate-to-consumer product sales and subscription design, while the firm this year also established an formidable aim to go all electric powered by 2030. Elevating additional funds will easy the shift away from legacy combustion engines and set the firm on program to chase the higher valuations of other EV professionals like Nio and Tesla.

The carmaker, with an formidable prepare to only provide comprehensive EVs by 2030, ideas to use the funds to include carmaking ability so it can nearly double yearly product sales to a lot more than 1.two million cars. Volvo Autos also ideas to construct a battery plant in Europe.

“We have a really clear tactic to be an electric powered firm in 2030 and we’ve been on that journey for some decades now,” Volvo Autos CEO Hakan Samuelsson said in an interview. “With this, of program, we can protected that transformation, for the reason that of program, it’s not free of charge of charge.”

Geely earlier attempted to choose Volvo Autos public in 2018, but named off the listing just after investors have been said to balk at its valuation anticipations of as a lot as $30 billion.

The IPO also comes much less than a thirty day period just after EV maker Polestar, managed by Volvo and Geely, said it will go public in New York through a blank-check out merger. The deal implies an organization benefit of $twenty billion for the startup, with Volvo anticipating to keep a fifty % stake in Polestar just after it lists.

Goldman Sachs Team and SEB are worldwide coordinators on the IPOs, together with bookrunners Morgan Stanley, BNP Paribas, HSBC Holdings, JPMorgan Chase & Co. and Nordea Lender. Carnegie Expense Lender and Swedbank are co-guide managers.

Volvo has earlier said that operator Geely Holding will continue being its greatest shareholder just after the listing.

Reuters contributed to this report