Geely’s Volvo Cars jumps 13% after IPO values it at $18 billion By Reuters

By Helena Soderpalm and Abhinav Ramnarayan

STOCKHOLM (Reuters) -Automaker Volvo Vehicles’ shares rose 13% above their provide worth in its buying and selling debut in Stockholm on Friday, following the completion of Europe’s greatest preliminary public providing (IPO) to date this 12 months.

The Gothenburg-based firm lower the dimensions of its itemizing and priced it on the backside of a previously-announced vary UPDATE 3-Volvo Vehicles provides itself $18 bln price ticket as cuts IPO measurement – Reuters Information on Monday, valuing it at simply over $18 billion and making it Sweden’s second largest itemizing but.

The profitable deal and after-market efficiency is a lift to a European automotive trade that has launched into a difficult transition in the direction of electrical automobiles.

It additionally exhibits that whereas the IPO euphoria of the primary half of 2021 is over, the market is open for brand new listings of sizeable corporations with a narrative to inform.

Volvo Vehicles Chief Govt Håkan Samuelsson stated the itemizing symbolised a recognition of its transformation plans.

“It is a very thrilling journey, and now now we have the cash for it,” he informed journalists and buyers in a webcast opening ceremony on Friday.

Shares within the carmaker, which is majority owned by Geely Holding, have been buying and selling at 60 Swedish crowns ($7.03) at 0837 GMT, after being priced at 53 crowns within the preliminary public providing (IPO).

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Aside from Volvo’s dedication to changing into a purely electrical carmaker by 2030, it additionally has a 49% stake in EV enterprise Polestar https://www.reuters.com/enterprise/autos-transportation/ev-maker-polestar-go-public-20-billion-valuation-via-spac-sources-2021-09-26, which stated in September it could go public by means of a $20 billion deal.

A supply conversant in the transaction stated the end result of this week’s IPO was good, though buyers had pushed again and compelled Volvo to cost on the backside of the introduced vary.

“The corporate needed to compromise on measurement and the governance construction. They have been hoping for a learn throughout on Polestar, however they have been clearly not getting that,” the supply stated, requesting anonymity as a result of they weren’t authorised to talk to the press.

Considerations over how a lot management Geely will retain over Volvo, issues within the international provide chain and worries automobile makers may very well be caught in commerce wars involving China additionally curbed investor enthusiasm.

Geely chairman Eric Li stated that when Geely acquired Volvo, its aim had been to ship “the tiger again to the mountains”.

“Now our aim is to offer that tiger wings and let it soar,” he stated in a pre-recorded video.

($1 = 8.5219 Swedish crowns)