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ERICSSON

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”.

AFX

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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