Volvo Cars intends to decrease its stake in the electric car brand Polestar to 18% by selling shares worth 9.5 billion crowns (approximately 850 million euros) to its shareholders. The transaction, expected to be finalized this spring, marks Volvo’s strategic shift to focus on its core development while maintaining operational ties with Polestar.
The decision to reduce its financial involvement in Polestar, a joint venture with Geely, was announced earlier this month. Volvo Cars plans to sell 62.7% of its shares in Polestar to its shareholders, leaving it with an 18% stake post-transaction, down from its current 48%.
See also: Polestar Unveils Innovative Digital Rearview Mirror in the Polestar 4 Crossover
The share distribution will be carried out through a 2:1 share split, followed by an automatic share redemption process. Shareholders can choose to become direct owners of Polestar or sell their redemption shares for cash. The deadline for the share split is April 12, with all necessary approvals to be obtained by April 5.
Volvo’s largest shareholder, Geely Sweden Holdings AB, which holds 78.7% of Volvo Cars’ shares and votes, supports the transaction and has agreed to vote in favor of the distribution at the Annual General Meeting on March 26. Geely will continue to support Polestar operationally and financially.
“While we will maintain close operational ties with Polestar in areas such as research and development, production, customer service, and sales, Volvo Cars will not provide further funding to Polestar,” said Jim Rowan, President and CEO of Volvo Cars. “The proposed distribution positions Volvo Cars strategically and provides direct exposure to the Polestar share for our shareholders.”
See also: Polestar’s Smartphone Listed on Google Play Store Compatibility List
Daniel Donghui Li, CEO of Geely Holding Group, expressed strong support for the proposed distribution, emphasizing Geely’s confidence in Polestar’s future growth and commitment to supporting its business plan and financial targets.
Polestar, which began as a private company specializing in tuning Volvo models, later became a joint venture with Geely focused on electric vehicles. Despite missing its 2023 targets and undergoing restructuring, Polestar is seen as entering an exciting phase with a strengthened business plan and readiness for future growth.
