Johansson era almost over

Two major changes in the ownership of Ericsson in the past couple of years have dramatically changed the playing field in the telecoms giant and have now led chair Leif Johansson to throw in the towel.

The first incident was a shift of power at Ericsson’s principle owner Industrivärden in 2015. This change led indirectly to Christer Gardell, of Cevian Capital, seizing a chance to buy as many shares as it could in Ericsson, making it the largest owner in terms of capital. With Christer Gardell, who clearly wanted Leif Johansson out of the post of chair, at the top of the owners’ list, and a new management at Industrivärden with little sympathy for Johansson, it was difficult for even Investor to save the chair.

Leif Johansson’s time as chair of Ericsson has been a disaster in terms of the company’s progress and how the board has managed its duties. As he leaves the post an era in Swedish business comes to an end. For almost three decades he has been one of the heavyweights in Swedish business although his star status has dipped as it became clear the returns he brought shareholders were no longer in the top league.

Gardell paves way for power shift

The news that Cevian Capital has bought more than 5% of the capital in Ericsson is just further proof that Investor and Industrivärden have failed to control the telecom giant, suggests Dagens Industri. Well-run companies with an efficient structure and a competent board of directors do not receive visits from activists. No activist would dream of buying a share of Atlas Copco, or any other company in the Douglas sphere, continues the business daily.

It is quite feasible that Christer Gardell’s Cevian Capital will call for the elimination of different voting rights, which would raise the value of the company. If Christer Gardell chooses to pursue the matter, it is reasonable to assume that he will receive the backing of Industrivärden and institutional owners, thereby paving the way for a shift of power.