Swedish pension providers AMF and Folksam both announced they bought billions of kronor of newly-issued shares in Volvo Cars in the initial public offering (IPO) which took place on the Stockholm Stock Exchange yesterday for the portion of equity not kept by its Chinese owner.
AMF said it invested SEK2.3bn (€232m) in new shares, and converted preference shares to a value of SEK3.2bn in the IPO, bringing its total investment in the Swedish industrial stalwart to SEK5.5bn, which it said corresponded to just over 3% of the total number of shares in the company.
Folksam announced it was converting all the preference shares it held in Volvo Cars into ordinary shares, and investing an additional SEK1bn in connection with the IPO – bringing its total investment in Volvo Car’s ordinary to more than SEK3.1bn.
Volvo, which is owned by Chinese group Zhejiang Geely Holding, announced yesterday that the IPO and listing on Nasdaq Stockholm had been “substantially oversubscribed” and attracted strong interest from institutional investors in Sweden and abroad as well as from the general public in the Nordics.
The price per share in the offering was set at SEK53, which it said corresponded to a market capitalisation for Volvo Cars of SEK158bn for all outstanding shares in the company.
Volvo said that if the overallotment option in the IPO terms was exercised in full, and including the converted investments from AMF and Folksam, the resulting free float would corresponds to approximately 17.9% of Volvo Cars – with SEK23bn having been raised for the firm.
Anders Oscarsson, head of equities and ownership at AMF, said: “I think this is a good deal for our savers – it is always the starting point for us when we make an investment.
“But I also think it is good for the company, the stock exchange and Sweden that Volvo Cars is now a listed company,” he said.
AMF was now looking forward to continuing to follow one of Sweden’s most important industrial companies, as their active and long-term owners, he said, and the firm’s journey towards increased electrification and automation.
“The opportunities for success are strengthened by the stock exchange listing, as well as by the fact that they will now follow the Swedish Code of Corporate Governance, which – not least – increases transparency and transparency in the company,” Oscarsson said.
Meanwhile, Michael Kjeller, Folksam Group’s deputy chief executive officer and head of asset management and sustainability, said his firm decided to invest an extra SEK1bn in the IPO when the terms of issue became so financially attractive.
“It is an exciting change that the company is making and one which we are happy to contribute to,” he said, adding that Folksam – which has a large accident insurance operation alongside its life and pensions business – also shared the same commitment as the carmaker on issues related to road safety.
Folksam said Lenner & Partners had been an adviser in the deal.
Both Folksam and AMF invested via preference shares in Chinese-owned Volvo Cars back in 2016, and reinvested these in 2019.