Cevian Capital buys more than 5 pct of Sweden's Ericsson

China posted a good read on manufacturing for May

China posted a good read on manufacturing for May

Ericsson (ERIC) shares traded at the highest level of the year Wednesday as investors reacted to Cevian Capital's new stake in the Swedish telecom equipment maker.

Ericsson shares have fallen by a third in the past two years as the firm was hit by a drop in spending by telecoms firms and weak emerging markets.

The firm, which reported an operating loss of 12.3 billion crowns ($1.41 billion) in the first quarter, also faces mounting competition from China's Huawei and Finland's Nokia.

Cevian named managing partner Christer Gardell as its representative in the nomination committee, which consists of a total six members.

"It's about hard work ahead".

Ekholm wants to focus the business on lucrative core networks while restoring profitability in its IT & Cloud unit.

"But plans are not enough to bring success, it is how theplans are implemented".

News of the stakebuilding sent Ericsson shares up almost 6 percent on Wednesday, with investors hoping that Cevian could help the Swedish telecom company's drive to restore profitability by focusing on lucrative core networks.

Investor AB and fellow major stakeholder Industrivarden both said it was positive that other investors show interest in Ericsson but would not comment on any possible impact or strategy from Cevian specifically.

Mr Gardell said: "The action from the main investors has been too late and completely insufficient".

Ericsson's U.S-listed depository receipts turnedpositive after the news and were up 1.9 percent by 1748 GMT.

Cevian now owns 168 million Ericsson B-shares and about 114,000 A-shares in Ericsson, according to a filing with the U.S. Securities and Exchange Commission on Tuesday, equivalent to just over 5 percent of Ericsson's share capital.

The activist investor holds large stakes in companies suchas Swiss power transmission and industrial automation firm ABB, Swedish truck maker Volvo and Germanindustrial group Thyssenkrupp.

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