August 28, 2019 / 6:58 AM / 3 months ago

Ericsson CEO Ekholm set to leave, Saab's Buskhe could replace him -paper

STOCKHOLM (Reuters) - Telecom equipment maker Ericsson’s (ERICb.ST) CEO Borje Ekholm could be about to announce his exit after less than three years in the job with outgoing Saab CEO Hakan Buskhe planned as his replacement, business daily Dagens Industri reported on Wednesday citing anonymous sources.

FILE PHOTO: Ericsson President and Chief Executive Officer Borje Ekholm delivers a keynote speech at the Mobile World Congress in Barcelona, Spain, February 27, 2018. REUTERS/Sergio Perez

Ekholm - a veteran board member and former CEO of Investor AB (INVEb.ST) - became CEO in January 2017 after the Swedish company ousted its previous top executive, Hans Vestberg, due to weakening profitability and pressure from major shareholders.

“The idea is that Hakan Buskhe will take over as CEO of Ericsson. Borje has taken Ericsson out of the crisis and done it well. Now someone needs to come in and move things along,” a source told the paper.

Ekholm was picked to steer the company through one of its deepest crises, which has included soft markets, intense competition, heavy restructuring and thousands of job cuts.

Ericsson’s shares fell 2% by 0801 GMT. They have risen 44% since Ekholm became CEO, sharply outperforming a 25% rise in the STOXX Europe 600 Technology index .SX8P.

Investor AB, controlled by Sweden’s Wallenberg business family, is the biggest shareholder in both Ericsson and Saab, with 23% of the votes in the telecom gear maker and nearly 40% in the defence firm.

Dagens Industri said Ekholm could announce his departure in the next six months, while Saab said earlier this month that Buskhe would step down as CEO early next year.

Both Investor AB and Ericsson declined to comment on the report.

Under Ekholm’s tenure, profit margins have improved and Ericsson’s earnings have beaten market forecasts in five out of the past six quarters, as the company saw growing demand for next-generation 5G equipment.

Ericsson’s second and third biggest owners in terms of votes are Industrivarden (INDUa.ST) and activist investor Cevian Capital, holding 15% and 5% respectively at the end of 2018.

Cevian declined to comment while Industrivarden was not immediately available for comment.

Reporting by Johannes Hellstrom and Helena Soderpalm; Editing by Niklas Pollard and Susan Fenton

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