Ericsson takeover by Cisco likely in the longer term
Ericsson [STO:ERIC-A], the Swedish telecom technology company, will likely end up being taken over by Cisco [NASDAQ:CSCO], the California-based network equipment manufacturer, in the long term, according to a report by Dagens Industri that cited analyst comment on the company. This report follows recent reports by the same news service that Cisco has been looking to acquire for the last year.
The Swedish business daily cited an analyst report by SEB which stated that a takeover deal between Cisco and Ericsson may very possibly occur. The Nordic bank Nordea commented that it is likely that the two companies have discussed a takeover but that the outcome was collaboration. The bank also stated that the collaboration may be a step towards a takeover which the bank believe may occur within five years.
Meanwhile, one unnamed equity manager speculated that Ericsson's major shareholder, Investor, is likely interested in re-acquiring the Swedish truck manufacturer Scania and that this would be a reason to sell the Ericsson stake. The paper noted that Investor's stake in Ericsson is currently worth SEK 14bn (EUR 1.5bn).
The item also cited a newswire report in which a Cisco spokesperson denied that the American company wished to acquire Ericsson.
In a separate article, the paper asked Ericsson's chairman, Leif Johansson, why the company hadn't informed the market about Cisco's takeover interest to which he responded that the two companies have not discussed a takeover or merger.
Ericsson's major shareholders, Investor and Industrivarden, declined to comment on the matter.
Dagens Industri