Volvo Announces IPO, Polestar Does SPAC Merger

Matt Posky
by Matt Posky
volvo announces ipo polestar does spac merger

Volvo Cars has confirmed months of speculation by announcing that it’s planning to go public on NASDAQ Stockholm. On Monday, the automaker stated that it would be seeking to raise 25 billion Swedish kronor (nearly $2.9 billion USD) via the selling of new shares as a way to fast-track its electrification plans. Those include ensuring half its annual volume being represented by EVs and transitioning the majority of its sales stemming from online orders by 2025.

While the targeted IPO valuation is unknown, prior information coming from Zhejiang Geely Holding Group (Volvo’s Chinese parent company) suggested it was aiming for something in the neighborhood of $20 billion. We’ve also learned that the collaboratively owned Polestar would also be going public, except it will be using the always sketchy special-purpose-acquisition-company merger to help pump the stock.

We’re expecting more concrete details as the week progresses. But Reuters is currently speculating Volvo’s valuation at $20 billion while The Wall Street Journal has it set at $25 billion. The duo also had no idea how much stock Geely would retain, though we’re operating under the assumption that the group would like to remain the largest shareholder moving forward. Volvo has asserted that the money will be reinvested into transitioning toward becoming an electric-only automaker by 2030.

Those prospective valuations are huge when compared to manufacturers similar in size to Volvo Cars. Of course, we’ve also seen Tesla running with a market capitalization that hardly seemed to make sense for years. Volvo’s September sales may be down by 30 percent (year-over-year) but the company is trying to capture the more-fashionable corner of the automotive market and get investors excited about growth potential as it swaps to EVs.

There are similarly high bars being set for the performance-focused Polestar. Launched in 2017, the company only has a couple of vehicles on offer. However, it’s working to expand that lineup while targeting a 2.3-percent share of the global premium market by 2025.

From WSJ:

Last week, Polestar, a Swedish electric-vehicle maker jointly owned by Volvo, Geely and others, announced plans to merge with a special-purpose acquisition company and list in New York in a deal that would value the Swedish EV company at roughly $20 billion.

Volvo said last month that it expected to own close to 50 [percent] of the combined company after the completion of Polestar’s merger with Gores Guggenheim Inc.

The Polestar deal generated a pathway for Volvo to pursue its own offering by assigning a value of about $10 billion to its stake.

“It was important to separate the issue,” Volvo Chief Financial Officer Björn Annwall said, adding that investors now see that Volvo, too, after shedding its internal-combustion-engine-manufacturing business is going electric faster than some rivals.

“Investors see that as a clear sign that we’re not only saying we’re going to become electric, we’re doing it,” Mr. Annwall said.

Both companies have set wildly aggressive targets. Polestar has said it plans on adding three new vehicles to the lineup by the end of 2024. It has also said it would need to more than double the number of global markets in which it currently operates to obtain its desired market share by the following year. Meanwhile, Volvo is vying for annual sales averaging 1.2 million units — requiring a roughly 50-percent in sales over the next three years.

[Images: Volvo Cars; Polestar]

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  • SCE to AUX SCE to AUX on Oct 05, 2021

    "Both companies have set wildly aggressive targets." Yep, so prepare for disappointment.

  • ThomasKing ThomasKing on Dec 02, 2022

    It's been a long road to IPO and IPO day for Volvo but it looks like they're getting all geared up to hit the market and make their IPO, which will be worth around $500M. This is good news for those of us who care about 'going green' and our planet. I prefer to check this handyman services and get more new helpful ways for construction. What we must do is help Volvo reach its goal by growing our economy, helping out the environment and by supporting new car models that look great on the inside.

  • Dusterdude @El scotto , I'm aware of the history, I have been in the "working world" for close to 40 years with many of them being in automotive. We have to look at situation in the "big picture". Did UAW make concessions in past ? - yes. Do they deserve an increase now ? -yes . Is their pay increase reasonable given their current compensation package ? Not at all ! By the way - are the automotive CEO's overpaid - definitely! (That is the case in many industries, and a separate topic). As the auto industry slowly but surely moves to EV's , the "big 3" will need to be producing top quality competitive vehicles or they will not survive.
  • Art_Vandelay “We skipped it because we didn’t think anyone would want to steal these things”-Hyundai
  • El scotto Huge lumbering SUV? Check. Unknown name soon to be made popular by Tiktok ilk? Check. Scads of these showing up in school drop-off lines? Check. The only real over/under is if these will have as much cachet as Land Rovers themselves? A bespoken item had to be new at one time. Bonus "accepted by the right kind of people" points if EBFlex or Tassos disapproves.
  • El scotto No, "brothers and sisters" are the core strength of the union. So you'll take less money and less benefits because "my company really needs helped out"? The UAW already did that with two-tier employees and concessions on their last contract.The Big 3 have never, ever locked out the UAW. The Big 3 have agreed to every collective bargaining agreement since WWII. Neither side will change.
  • El scotto Never mind that that F-1 is a bigger circus than EBFlex and Tassos shopping together for their new BDSM outfits and personal lubricants. Also, the F1 rumor mill churns more than EBFlex's mind choosing a new Sharpie to make his next "Free Candy" sign for his white Ram work van. GM will spend a year or two learning how things work in F1. By the third or fourth year GM will have a competitive "F-1 LS" engine. After they win a race or two Ferrari will protest to highest F-1 authorities. Something not mentioned: Will GM get tens of millions of dollars from F-1? Ferrari gets 30 million a year as a participation trophy.