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Volvo resurrects plans for IPO

Volvo Cars is resurrecting plans to seek a stock market listing, three years after the Chinese owners of the Swedish premium carmaker pulled the plug on an IPO amid trade war fears.

Volvo’s board on Wednesday evening said it would look at listing in Stockholm later this year but that the final decision would be subject to “market conditions”.

The Swedish carmaker also extended the contract until the end of 2022 of its 70-year-old chief executive Håkan Samuelsson, who has helped turned the group round following its stagnation under the ownership of Ford Motor.

“A potential listing on the Nasdaq Stockholm stock exchange could create an opportunity for global investors to participate in our journey to become a leader in the fast-growing premium and intelligent electric vehicle segment while continuing to deliver on what customers expect from the Volvo brand,” Samuelsson said.

Zhejiang Geely, the Chinese group that bought Volvo in 2010 for $1.8bn, said it would remain a major shareholder in the carmaker after the listing. In 2018, Geely had sought a valuation for the Swedish group of at least $30bn before pulling the IPO, according to people familiar with the situation. Volvo declined to comment on its current potential valuation.

“We have supported the transformation and growth of Volvo Cars for the last 10 years, enabling the company to become a true premium brand with improved profitability,” said Li Shufu, Geely’s and Volvo’s chair.

Volvo has the most ambitious electrification plans of any leading carmaker. It aims to have half its sales by 2025 be fully electric cars and from the end of the decade only sell battery cars.

It is investing heavily in electrification and autonomous driving but analysts have long queried its ability to do so because of its relatively small size compared with premium rivals such as the German trio of Audi, BMW and Mercedes.

Volvo sold 662,000 cars last year compared with 1.69m at Audi, 2.03m at BMW, and 2.05m at Mercedes.

The news of the IPO comes just months after Volvo and Geely abandoned plans to merge, instead opting to pool electric vehicle technology and software development. The Chinese carmaker has other smaller brands such as Britain’s Lotus, Malaysia’s Proton, and the Lynk & Co marque that is co-owned by Volvo and Geely.

Volvo was one of the biggest overseas acquisitions done by a Chinese company, and is widely seen as a success as Geely has avoided micromanaging the Swedish brand — well known for its safety features — unlike previous owner, Ford.

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