Sweden

Cigarless Swedish Match has pull for Marlboro Man

15 Sep 2021

The $15 bln oral tobacco maker is spinning off its stogies to quit the combustion business. With its ambitious smoke-free revenue targets, Philip Morris may be keen on what’s left. Judging by its pumped-up takeover of inhaler firm Vectura, it may take the hit, however pricey.

Juicy Nordic drug buyout needs safety label

2 Sep 2021

Advent and GIC are paying $8 bln for Swedish Orphan Biovitrum, which specialises in rare-disease treatments. The new owners will need to invest in fresh products and fend off rivals, all while keeping staff. The potential returns look appealing but come with a fair dose of risk.

Klarna’s list of suitors may not be that extensive

4 Aug 2021

Following the $29 bln swoop on Afterpay by Jack Dorsey’s Square, its $46 bln Swedish instalment-payment rival could be in play. Yet Klarna is pricey, not a pure pay-later player, and might not sell to a credit card giant. Stripe and PayPal look the most likely bidders.

Self-driving is pricey route to car parts future

23 Jul 2021

Magna International is paying $3.8 bln for Sweden’s Veoneer, which makes systems that help cars steer themselves. It reduces the $25 bln Canadian group’s exposure to combustion engines. But CEO Swamy Kotagiri will have to put his foot down to keep financial returns on the road.

EQT makes hay while clouds begin to gather

22 Jul 2021

The $46 bln buyout group’s shares rose 11% after first-half earnings soared. CEO Christian Sinding is selling companies in frothy markets while return-hungry investors pile into his funds. Higher interest rates would undermine both trends, as well as EQT’s richly priced equity.

Cigar exit is next strike in Swedish Match revamp

20 Jul 2021

Most of the $14 bln group’s sales come from oral tobacco and nicotine pouches which are less harmful than cigarettes, giving it a rich valuation. But rivals like Philip Morris are catching up. Getting out of stogies could raise $2 bln and give its stock a brighter ethical flame.

Swedish tech investor benefits by slimming down

12 Jul 2021

Most listed investment firms trade at a discount to the net value of their assets. Kinnevik’s recent decision to hand its stake in e-tailer Zalando to shareholders has made it an exception. Shedding future winners from its $9 bln portfolio will be vital to preserving its status.

Combustion shift helps electrify Volvo IPO

8 Jul 2021

The Swedish carmaker is steering its petrol engine unit into a joint venture with parent Geely before a stock market listing. Focusing on future electric car sales helps drive Chairman Li Shufu closer to a racy valuation. Still, ongoing gas guzzler sales dent green bona fides.

Oatly IPO pumps fresh air into plant-based stocks

20 May 2021

The Swedish group that makes dairy substitutes out of oats surged 30% on its debut, valuing it at $13 bln. Despite heavy losses and growing competition, investors clearly believe the shift in consumption habits is more than a fad. It bodes well for other stock market hopefuls.

EQT spins Micro Focus misfortune into gold

26 Apr 2021

The Swedish buyout firm may float software group SUSE for up to $10 bln, having paid its struggling UK owner $2.5 bln in 2018. It’s a classic corporate carveout on steroids. One lesson is that CEOs should put more effort into retaining possible upside when selling their castoffs.

Oatly’s IPO health depends heavily on China

20 Apr 2021

A partnership with Starbucks in the People’s Republic boosted the Swedish oat milk maker’s sales and profile. Major investor China Resources should help with future growth. But the state-backed group’s involvement is also a risk for buyers of its mooted $10 bln U.S. listing.

H&M kicks off Europe’s unfashionable China dilemma

25 Mar 2021

The $35 bln Swedish retailer is under sudden attack over an old statement saying it doesn’t source materials from controversial Xinjiang. Many EU companies want both greater access to the giant market and ESG credibility. Beijing will make it choose which is the bigger priority.

Klarna listing would be a mixed blessing

25 Feb 2021

The Swedish fintech’s next funding round could value it at $30 bln, and it’s mulling a direct listing. Allowing early investors to cash out carries obvious appeal. The downside is there would be a daily commentary on Klarna’s regulatory risks and shortcomings relative to rivals.

Oatly value ingests Beyond Meat’s bloat

24 Feb 2021

The Oprah-backed oat milk maker can hit a $9 bln valuation in an IPO based on its faux meat rival’s multiple. That’s an almost fivefold increase from last year. Big partnerships help justify growth. But using one inflated stock to validate another is too much of a good thing.

EQT leaves hot markets behind with $15 bln pet LBO

10 Feb 2021

Instead of floating vet group IVC Evidensia, the buyout shop is selling it to its new fund, and Silver Lake. Stock valuations may be choppier when it finally lists, but the company’s rapid growth should help. Even in an IPO rush, private equity is hanging on to the best assets.

Spotify has bigger issues than slower growth

3 Feb 2021

Shares in the $60 bln Swedish music-streaming group fell after it warned a pandemic-inspired boost to subscribers and revenue may not last. More worrying for CEO Daniel Ek is that costs are still growing roughly as fast as sales. That’s out of tune with a puffed-up equity value.

Ericsson’s China gains heighten blowback risks

29 Jan 2021

The $41 bln Swedish telecoms kit maker’s prospects are soaring due to Western bans on Chinese rival Huawei. But the Middle Kingdom is also its hottest 5G equipment market. The risk of reprisals should its own government ban Huawei are increasing.

EQT puts runaway share price to good use

26 Jan 2021

The $28 bln Swedish private equity firm linked to the Wallenbergs is issuing $800 mln of equity to the founders of Exeter, an American property investor. The deal expands its U.S. presence and helps diversify away from lumpy buyouts. While risky and expensive, it may just work.

EQT’s $2.8 bln pharma bet relies on sales booster

14 Dec 2020

The Swedish buyout firm is buying manufacturer Recipharm, which handles outsourced production for drug giants like Moderna. Given the target’s already heavy borrowings, delivering a decent return for EQT’s investors will depend on ramping up revenue growth.

Buy-now-pay-later exposes regulation blind spot

8 Dec 2020

Sweden’s Klarna and Australia’s Afterpay both allow punters to buy goods and defer payment. Opinion is divided over how regulators should treat any loss on the enabling financing. Balancing innovation and stability is hard, but the rules right now aren’t clear enough.