Volvo has a reputation for making some of the safest cars on the road. And it seems it wants to keep things as safe as possible for its shareholders too.
Volvo’s Chinese owner Geely was planning a stock market debut for the carmaker in Stockholm later this year at a valuation of at least $30 billion.
But it has hit the brakes on the IPO on concerns that Volvo’s shares might suffer from the market uncertainty triggered by the trade row between Beijing and Washington.
Volvo boss Hakan Samuelsson says the fear was that the share price could drop after the float. “The issues around trade are hard for us because they impact cars shipped between China and the US. It’s a huge drawback,” he told Bloomberg. “The risk is that these headwinds will increase.”
There were 45 auto sector IPOs around the world last year, raising nearly $7.8 billion, according to Dealogic data. This year only 12 have gone ahead, raising $1.8 billion.
Another reason for the delay is that Geely founder Li Shufu has decided that the brand needs to make further progress in the Chinese market, an insider at the company told Reuters. Geely bought Volvo from Ford eight years ago for $1.8 billion.
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