Ericsson boss favours organic growth

Ericsson chief executive Carl-Henric Svanberg said the company is not short of potential partners interested in tie ups, but major acquisitions would hinder profit growth, and he prefers the Swedish giant to grow organically, reported Swedish business magazine Affarsvarlden.

Svanberg rejected suggestions that Ericsson may be forced to seek a merger in the wake of the Alcatel/Lucent Technologies deal. He said if he had been interested in such a course he would already have acted.

“Should we have been interested we would already have done something, since the advantage lies with the first to act,” said Svanberg, adding of the Lucent and Alcatel merger: “It doesn’t force us to do anything”.

Svanberg acknowledged the merged Alcatel and Lucent will provide “tough competition” in the important market for converging networks, but said Ericsson had already strengthened its hand through the acquisition of the UK’s Marconi, and that further acquisitions would have stymied profit growth.

“And if we had made a big acquisition some time earlier I don’t think we would have grown by 35 billion kronor (net profit), which we have over the last 2 years, said Svanberg, “So I think that to have a strong position and to grow organically is very valuable”.