Sweden-based investment company Investor AB regained its position as Ericsson’s largest shareholder, overtaking Cevian Capital during the third quarter.

Reuters reported Investor raised its stake in the troubled Swedish vendor to 6.6 per cent, from 5.9 per cent, after buying up shares worth SEK1 billion ($123 million.)

Activist investor Cevian Capital first invested $1 billion in a 5.6 per cent stake at the end of May to become Ericsson’s second largest shareholder by capital, and then increased it to 6.4 per cent shortly after to take a leading position.

However, it still ranked way behind Investor with regards to voting rights, given the latter’s holdings of class-A shares.

As of 30 September, Investor held 22.2 per cent of the votes compared with Cevian’s 3.4 per cent.

Attractive valuation
Stefan Stern, head of communications at Investor, said the company tended to “make add-on investments from time to time when we think the valuation is attractive”.

Investor’s move to retake a leading position comes a week after Ericsson’s nomination committee proposed the appointment of Ronnie Leten, the former CEO of industrial company Atlas Copco, to replace outgoing chairman Leif Johansson.

Cevian Capital’s managing partner Christer Gardell welcomed Investor’s move, stating it “shows they believe in the company and its potential”.

Traditionally, Ericsson’s ownership was dominated by Investor and another Sweden-based investment company, Industrivarden.

Cevian Capital, one of Europe’s largest investment companies, came on to the scene during turbulent times for the vendor.

Ericsson is currently facing intense competition from major network vendor rivals Nokia and Huawei in the race to develop 5G equipment.

After shareholders ousted long serving CEO Hans Vestberg in 2016, successor Borje Ekholm initiated a restructuring plan designed to revive the company’s fortunes.

The strategy places more focus on Ericsson’s core networks business. Cevian Capital said in May it backed the vision, but warned the company must deliver on its potential.

Ericsson’s Q3 results will be released on 20 October.