Automotive

Volvo Cars Group Selects Three US Advisors on IPO

Volvo Cars owner Zhejiang Geely Holding Group Co. selected three major investment banks to advice on an initial public offering this year. The three companies are Citigroup Inc., Goldman Sachs Group Inc., and Morgan Stanley.

According to people knowledgeable with the matter, the offering could value the carmaker between $16-30 billion in a stock sale. They also said that the companies held meetings in Sweden and Hong Kong this month to discuss a dual listing in both revenues.

They added the possible listing may happen as soon as September this year. However, market conditions will ultimately determine the timing.

The people requested not to be identified, as the current deliberations are confidential.

According to reports, Volvo Cars may seek to benchmark itself against automakers including Hong Kong-listed Geely Automobiles Holdings Ltd. and Tesla Inc. in the possible IPO.

A representative for Volvo Cars said that an IPO is an option but the decision is up to the owner.

Geely, on the other hand, said in a statement on Friday that the firm was looking for possibilities when asked about the dual listing plans for Volvo Cars, and they haven’t made a final decision on how to proceed as of yet.

Representatives for Citigroup, Goldman Sachs, and Morgan Stanley declined to comment.

Favorable Background

The Chinese group, which controls the domestic-based carmaker Geely Automobile Holdings, has a majority stake in sports carmaker Lotus. It also has a 49.9 stake in Malaysian automaker Proton and flying car start-up Terrafugia.

It acquired Volvo in 2010 and refreshed its lineup to make it a popular alternative to German luxury stalwarts.

According to its website, the Chinese company’s Swedish unit holds 99 percent of Volvo Cars AB, and institutional investors holds the remaining 1 percent through another class of shares.

Shares of Geely surged 2.4 percent in Hong Kong’s early trade on Friday after doubling over the last 12 months.

Geely Automobile has been dominating the global market with billions of dollars worth of deals overseas in 2017. This includes a $9 billion stake in Daimler AG, the German owner of Mercedes-Benz.

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