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| Volvo plans to accelerate the transition to electric cars |
Swedish luxury car maker Volvo, a subsidiary of Chinese automaker Geely, has announced an initial public offering (IPO) to raise more money to accelerate its transformation into an all-electric car company.
It was reported last week that Polestar, a joint venture between Volvo and Geely, will be going public through a merger with Special Purpose Acquisition Corporation (SPAC).
The deal valued Polestar at about $20 billion. Although only two models are sold, the luxury hybrid coupe and sedan with all-electric backlighting.
Volvo has taken a more traditional path with an initial public offering on the Nasdaq Stockholm stock exchange, which could be valued at more than $25 billion.
The company said its goal is to raise about 25 billion crowns, equivalent to $2.86 billion, by issuing new shares. The goal is to use this money to accelerate the exit from the sale of gasoline cars to become a purely electric car company by 2030.
It also marks Volvo's incredible comeback, in 2010 Ford sold Volvo for $1.8 billion with a huge loss for Geely. After Ford bought the Swedish automaker for $6.5 billion in 1999.
Volvo has experienced a major expansion
Volvo launched its first fully electric car, the XC40 Recharge, last year. This SUV has a range of 320 kilometers and can charge its battery to 80% of its capacity in 40 minutes. The C40 Recharge is expected to hit the market later this year. The electric XC90 won't hit the market until 2022.
The list provides investors with an opportunity to bet that the auto industry will switch to all-electric vehicles as people become increasingly concerned about exhaust emissions and governments around the world push for luxury cars. .
As part of the IPO, Geely, the largest automaker in China, is selling part of its shares in Volvo. Geely did not say how many shares were sold in the sale or how the sale would affect the company's overall stake in the automaker.
However, the Swedish company said that the Chinese company will remain the largest shareholder after the conclusion of the deal. Swedish institutional shareholders Folksam and AMF also remain.
This news has boosted Volvo's development over the past 11 years. Since Geely acquired Volvo, Volvo has gone through a significant process of expansion. It has established two car assembly plants in China and one in South Carolina.
The Swedish automaker said in a statement that its relationship with Geely enables it to benefit from sharing current and future technologies. and coordinate procurement and economies of scale in order to achieve synergies, competitiveness and long-term value creation.