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Geely Seeks Volvo IPO Valuation Greater than $30 Billion
Geely Automobile Holding Co. won’t proceed with an initial public offering for its Volvo Cars unit unless it achieves a valuation of at least $30 billion, sources tell the Financial Times.
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Geely Automobile Holding Co. won’t proceed with an initial public offering for its Volvo Cars unit unless it achieves a valuation of at least $30 billion, sources tell the Financial Times.
Geely paid $1.8 billion to acquire Volvo Cars from Ford Motor Co. in 2010.
But the Chinese carmaker has advised banks seeking to be the deal’s chief underwriter that it won’t sell if it can’t reach its target. FT describes the desired valuation—about 10 times earnings—as “extremely lofty.” The newspaper notes that BMW and Daimler are valued at 2-3 times earnings.
If an IPO does move ahead, Geely will sell some of its equity in Volvo but remain the company’s largest shareholder, according to FT’s sources. The newspaper says most of the money raised by the offering would be used to pay for electrification and autonomous driving technologies.
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