STOCKHOLM -- China's Geely Holding is in advanced discussions with banks to list its Volvo Cars unit in the coming weeks, three sources told Reuters, in what is expected to be one of Europe's biggest initial public offerings this year.
Volvo Cars is aiming for a valuation of about $20 billion in the planned Stockholm listing, the sources said, with one saying the launch was pencilled in for the end of September.
Goldman Sachs and SEB are leading the transaction, while other banks including BNP Paribas, Carnegie and HSBC are also involved in the deal, the sources added.
Geely did not immediately respond to an emailed request for comment outside normal business hours in China. SEB and Goldman Sachs declined to comment. The other banks were not immediately available.
Volvo also declined to comment but Automotive News interviewed CEO Hakan Samuelsson for a separate story on Wednesday and asked him whether he thought the current chip shortage would dampen investor interest in the IPO.
“The financial market understands that this is something the whole industry is now experiencing. Everybody has the same [struggle],” Samuelsson said. “Nobody believes that Coronavirus will go on for five years' time. For an investor, this is a short-term disturbance.”
Samuelsson said a decision on an IPO will be made “by the end of this year.”
Geely, which bought Volvo from Ford Motor Co. more than a decade ago in the biggest acquisition by a Chinese firm of a foreign car maker, sought to float shares in the Swedish firm in 2018 but then pulled the deal citing trade tensions and a downturn in automotive stocks.
Traditional carmakers have fallen out of favor in recent years, as Tesla Inc. has risen to be one of the world's most valuable companies, putting the focus on electric vehicles.
Many European firms have pivoted toward the electric sector, including Volvo Cars which aims to only make fully electric vehicles by 2030 and owns a 49.5 percent stake in electric car maker Polestar.