STOCKHOLM (Reuters) – Ericsson has picked the previous boss of high-flying mining gear maker Atlas Copco as its new chairman, boosting hopes of a restoration on the Swedish cellular tools firm.
Shares in Ericsson rose as a lot as 2.2 % on Monday after it stated Ronnie Leten would succeed Leif Johansson as chairman, pending a shareholder vote deliberate for March 28. Johansson stated in July he needed to step down.
Traders stated Leten, underneath whose management Atlas Copco shares rose twice as a lot because the European industrial sector index, was a good selection, regardless of a scarcity of expertise within the telecoms sector.
“This mission is extra about main a piece for change along with the CEO. Ronnie will handle that in a wonderful approach,” stated Lars Soderfjell, a fund supervisor at Alandsbanken.
Ericsson has been hit arduous by competitors from China’s Huawei and Finland’s Nokia in addition to weak rising markets and falling spending by telecoms operators, with demand for next-generation 5G expertise nonetheless years away. Its shares have virtually halved in worth previously two years.
Earlier this 12 months, it drafted in Borje Ekholm as its new CEO, however activist investor Cevian Capital, which has purchased a greater than 5-percent stake, has been pushing for additional change.
Cevian Managing Companion Christer Gardell welcomed the selection of Leten, a 60-year outdated Belgian who stepped down as CEO of Atlas Copco earlier this 12 months.
“He has an excellent observe document as worth creator,” stated Gardell, who’s on Ericsson’s nomination committee, in an electronic mail.
Underneath Leten’s management, traders applauded Atlas Copco’s nimble value construction and robust aftermarket gross sales that drove excessive margins and a strong cashflow.
Leten can also be leaving his place as chairman at Electrolux, the house equipment maker stated in a separate assertion on Monday.
At 0950 GMT, Ericsson shares had been up 1 % at 47.20 Swedish crowns, whereas Electrolux’s had been down zero.9 % at 275.80 crowns.
Leten was seen by Swedish media and analysts as one in every of three probably candidates to develop into Ericsson’s chairman. The opposite two had been Autoliv CEO Jan Carlson and Johan Molin, CEO of Assa Abloy.
“Mr Leten is a really expert businessman, technically savvy and strategically versatile,” Johan Forssell, chairman of Ericsson’s nomination committee, stated in a press release.
Ericsson additionally proposed Kurt Jofs as a brand new board member. Jofs was chargeable for Ericsson’s networks enterprise from 2003-2008 and is at present chairman of Finnish IT providers firm Tieto.
Extra reporting by Johannes Hellstrom; Modifying by Mark Potter