Volvo Cars said it planned to distribute 62.7% of its stake in Polestar.
The stake distribution would be made as a 2:1 share split.
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Polestar was founded in 2017 as a joint venture by Volvo Cars and Geely. Volvo owns 48% worth SKR9.5bn (US$920.17m) and would retain an 18% stake after distribution.
The automaker had earlier signalled a “potential adjustment” to its Polestar shareholding.
Volvo Cars chief Jim Rowan said: “As we have significant operational collaborations with Polestar and a financial relationship, it is logical for us to retain influence through a smaller 18% stake.”
Geely Sweden Holdings is a majority owner of Volvo Cars with 78.7% of shares. It would continue to provide operational and financial support to Polestar.
The Chinese automaker said it intended to vote in favour of the distribution at Volvo’s 2024 AGM in March where the final proposal would be presented.
