Ericsson denied any discussion took place with Cisco over a potential merger or acquisition, following a report in a leading Swedish newspaper suggesting the mobile vendor could be swallowed.

The speculation follows last week’s announcement of a strategic partnership between the two firms.

But Dagens Industri (Di) said Cisco has been interested in buying Ericsson for some time, and wants to reach agreement with the Swedish firm’s board and leading shareholders.

The report said last week’s visit by Cisco’s executive chairman, John Chambers, to Ericsson’s Capital Markets Day in Stockholm had an ulterior motive – an attempt to find agreement with the Swedish firm on what would be the largest takeover in the country’s history.

But today’s statement by Ericsson CEO Hans Vestberg pours cold water on such speculation: “We note that there are rumours in the market regarding an acquisition of Ericsson by Cisco possibly spurred by the recent announcement of a partnership between our two companies.”

“The talks leading up to the partnership announcement have been ongoing for a year and there have not been any discussions whatsoever on a merger or an acquisition,” he added.

And at the partnership unveiling last week Cisco CEO Chuck Robbins was at pains to talk up how a strategic partnership between the two firms was preferable to a full-blown merger. It would appear odd to adopt to talk in those terms if a takeover bid might follow shortly afterwards.

Despite the duo’s strategic partnership, implying equality, Ericsson is easily outsized by Cisco across a number of metrics. Cisco’s most recent quarterly revenue was $12.7 billion, compared to the Swedish firm’s SEK59 billion ($6.78 billion), nearly twice as much. And Ericsson’s market capitalisation is SEK260 billion, while Cisco is almost five times the size.

However, Ericsson does possess a significantly larger patent portfolio than its US peer, a key attraction apparently.

And one source quoted in the Di report said: “The price tag on a bid from Cisco will be higher than the value Ericsson can achieve as an independent company, especially since the telecom giant faces considerable problems in the future.”

Ericsson’s shares have fallen this year, while the Stockholm Stock Exchange has risen.

Cisco is not thought to favour a hostile bid but that could change, said the report.

Key to any bid would be the attitude of Ericsson’s leading shareholders. Investor, an investment firm controlled by the Wallenberg family, is thought unlikely to sell. The next largest shareholder is Industrivarden, which might be more willing to sell at the right price, although it would be aware of the negative publicity associated with an iconic Swedish firm falling into foreign hands.