Volvo Cars on-again, off-again initial public offering efforts appear to be “on again” with it taking off, by some estimates, before the end of this month. The listing would be on the Stockholm exchange.
According to a Reuters report, Volvo’s Chinese parent company, Geely Holding, has been meeting with banks to sort out the details. If it comes to pass, it will mark the end — or beginning — of a push that began in 2018.
If it pans out, the $20 billion valuation is an interesting number, potentially hindering another auto company looking to go public: Rivian. The nascent EV maker, which just rolled out its first production-level R1T for a customer earlier today, is talking with U.S. bankers about an IPO, perhaps in late November.
Getting the numbers right
Part of that effort is securing a valuation approaching $80 billion. Many observers can see a valuation between $50 billion and $70 billion but think $80 billion is a stretch. That said, optimism about electric vehicles is high right now.
In fact, Lucid Motors, which has yet to build a production-level vehicle yet already has a market cap that exceeds what Volvo’s parent company is seeking at about $32.2 billion.
General Motors is worth, but only by a little at $74.4 billion. Ford is a bit further off the pace at $51 billion. By comparison, Fisker Inc., another startup, comes in at $3.9 billion. Tesla is currently the most valuable automaker in the world with a market cap hovering around $733.5 billion while Toyota is second at about $303.5 billion.
Company’s been working on it for a while
The plans have taken a few twists and turns during that time, including a potential merger of the Swedish-branded automaker with Geely Automobiles in early 2020.
China’s Geely Automobile said in February 2020 it was in early discussions with Volvo about combining the two into a global carmaker with listings in Hong Kong and Stockholm. The two companies were working on a joint proposal to present to each automaker’s board at that time.
“A combination of the two companies would result in a strong global group. We look forward to working with Håkan Samuelsson, president and CEO of Volvo Cars, to further investigate this opportunity with the goal to strengthen the synergies within the Group while maintaining the competitive advantage and the integrity of each individual brand,” said Li Shufu, chairman of Geely Holding Group, told Reuters.
However, it was ultimately scuttled because it was determined the companies were better off as separate entities.