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    VOLV B   SE0000115446

AB VOLVO

(VOLV B)
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AB Volvo : Volvo Cars gives itself $18 bln price tag as cuts IPO size

10/25/2021 | 02:51am EST

* Sets IPO price at 53 crowns per share

* Plans to raise 20 bln crowns ($2.3 bln ) in IPO

* Valuation of business just over $18 bln

* To start trading on Nasdaq Stockholm on Oct. 29 (Adds CEO, analyst comment, background)

STOCKHOLM, Oct 25 (Reuters) - Volvo Cars shrank its initial public offering on Monday, pricing it at the bottom of a previously announced range and valuing the Geely-owned business at just over $18 billion.

European and U.S. IPO markets have been hit by cancellations as inflation and global supply chain crunches have increased stock market volatility, while many more companies are reported to have pushed back plans rather than risk U-turns.

Volvo Cars, which had previously said its IPO would be priced within a range of 53 crowns ($6.2) to 68 crowns per share, said it was now opting for 53 crowns.

Carmakers have been hurt by production disruptions due to a semiconductor shortage, with several cutting production targets and shutting factories on concerns it will run well into 2022.

At the current price, Volvo Cars would be valued at just over $18 billion, well below the $23 billion it had expected at the top of the IPO pricing range.

Volvo Cars said it plans to raise around 20 billion Swedish crowns ($2.3 billion), down a fifth from its previous target.

CEO Hakan Samuelsson said he was "totally convinced" this would be enough, while the price should not be seen as negative.

"We have been listening to the market, humbly," he told news agency TT.

Political tension between Beijing and Stockholm persist after Sweden banned Huawei from its 5G networks and Swedish companies like Ericsson have lost business in China.

Geely, which paid Ford $1.8 billion for Volvo Cars in 2010, would not exercise an over-allotment option, while the amended offering would result in a free float of 16% to 17.9%.

Handelsbanken analyst Hampus Engellau said Volvo Cars had been careful to get secure all institutional Swedish investors.

"I would rather have seen a bigger share of the company listed to get a larger owner base and a liquid share... now we'll have a smaller share listed, which is somewhat unfortunate," he said.

Volvo Cars said the first day of trading on Nasdaq Stockholm was expected on Oct. 29, a day later than previously announced. ($1 = 8.5737 Swedish crowns) (Reporting by Helena Soderpalm and Supantha Mukherjee in Stockholm, Abhinav Ramnarayan in London; Editing by Niklas Pollard, Emelia Sithole-Matarise and Alexander Smith)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AB VOLVO 2.04% 204.9 Delayed Quote.3.61%
ERICSSON 0.88% 94.99 Delayed Quote.-3.57%
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Analyst Recommendations on AB VOLVO
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Financials
Sales 2021 365 B 40 198 M 40 198 M
Net income 2021 32 098 M 3 537 M 3 537 M
Net cash 2021 40 647 M 4 479 M 4 479 M
P/E ratio 2021 12,7x
Yield 2021 3,18%
Capitalization 409 B 44 976 M 45 090 M
EV / Sales 2021 1,01x
EV / Sales 2022 0,89x
Nbr of Employees 81 692
Free-Float 83,6%
Chart AB VOLVO
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AB Volvo Technical Analysis Chart | VOLV B | SE0000115446 | MarketScreener
Technical analysis trends AB VOLVO
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TrendsBearishNeutralBearish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 21
Last Close Price 200,80 SEK
Average target price 243,20 SEK
Spread / Average Target 21,1%
EPS Revisions
Managers and Directors
Martin Lundstedt President, Chief Executive Officer & Director
Jan Olof Ytterberg Chief Financial Officer & EVP-Group Finance
Carl-Henric Svanberg Chairman
Lars Stenqvist CTO & Executive VP-Group Trucks Technology
Sofia Frńndberg Secretary, Executive VP-Group Legal & Compliance
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