SKF Explores Sale of Aerospace Business After Cevian Push

  • In Business
  • 2022-12-06 09:07:14Z
  • By Bloomberg

(Bloomberg) -- SKF AB is exploring a sale of its aerospace operations, according to people familiar with the matter, as the Swedish industrial group trims peripheral businesses after activist Cevian Capital pushed for change.

Most Read from Bloomberg

  • 'Huge, Missing and Growing:' $65 Trillion in Dollar Debt Sparks Concern

  • Stocks Hit by Fed-Hike Jitters as US Yields Surge: Markets Wrap

  • Russia Blames Ukraine for Blasts at Bases That Damaged Warplanes

  • Elon Musk's Impossible Electric Truck Is Getting the Last Laugh

  • Ambitious Plans to Build Indonesia a Brand New Capital City Are Falling Apart

The company is considering a disposal of its business making specialty components for the aerospace industry like bearings and sealings, the people said. It could announce the plans as soon as this week, according to the people, who asked not to be identified because the information is private.

SKF has a capital markets day scheduled for Dec. 8. SKF shares rose as much as 3.3% on Tuesday. The stock was up 2.9% at 10:04 a.m. in Stockholm, giving the company a market value of 82 billion Swedish krona ($7.9 billion).

Aerospace accounted for 5% of SKF's 82 billion Swedish krona in net sales last year, according to the company's annual report. Omid Vaziri at Bloomberg Intelligence said the business had seen its profits dented amid struggles to pass on price increases in line with inflation.

Deliberations on the potential divestment are ongoing, and the exact scope and timing of a potential deal are still under review, the people said. A representative for SKF declined to comment.

Cevian, the activist investor led by Christer Gardell, disclosed a stake in SKF in August. The Stockholm-based investment firm said at the time it sees "significant long-term value potential in the company, which isn't at all reflected in the share price." It's since increased its holding to 7.9%, making it the company's second-biggest owner.

The activist regularly targets industrial companies it views as undervalued, including automotive supplier Autoliv Inc. as well as ABB Ltd. in Switzerland, which sometimes leads to asset sales. SKF shares surged on the news of Cevian building a stake, though the company's B shares are still down about 17% this year.

SKF announced cost cuts in October, including about 1,000 job losses, after operating profit missed average analyst estimates amid rising input costs and economic headwinds in Europe.

--With assistance from Jonas Ekblom.

(Updates shares in third paragraph, analyst comment in fourth paragraph.)

Most Read from Bloomberg Businessweek

  • The Club With a 60,000-Woman Waitlist

  • How to Cash Out of a Small Business Without Selling Out

  • 11 Hours With Sam Bankman-Fried: Inside the Bahamian Penthouse After FTX's Fall

  • TikTok's Viral Challenges Keep Luring Young Kids to Their Deaths

  • Can Duolingo Actually Teach You Spanish?

©2022 Bloomberg L.P.


More Related News

Adani's 413-Page Hindenburg Reply Aims to Calm Before Share Sale

(Bloomberg) -- Gautam Adani published a 413-page rebuttal of allegations of fraud by short seller Hindenburg Research, seeking to calm potential investors...

VW Targets Significant EV Returns From 2026, CFO Tells SZ
VW Targets Significant EV Returns From 2026, CFO Tells SZ

(Bloomberg) -- Volkswagen AG sees investments in new software and electric-vehicle technology peaking in the next two to three years with a goal of making...

Ilhan Omar Sees GOP Support for Keeping Her Foreign Affairs Seat
Ilhan Omar Sees GOP Support for Keeping Her Foreign Affairs Seat
  • World
  • 2023-01-29 17:36:11Z

(Bloomberg) -- Democrat Ilhan Omar expressed confidence that she'll keep her seat on the House Foreign Affairs Committee, saying allegations she is...

Ackman Says Banks Face Too Much Liability Exposure on Adani Deal
Ackman Says Banks Face Too Much Liability Exposure on Adani Deal

(Bloomberg) -- Investor Bill Ackman doubled down on his criticism of Adani Group, saying that there's just too much liability exposure for the banks involved...

Adani Risk Clouds Wall Street
Adani Risk Clouds Wall Street's Star Emerging-Market Bet

(Bloomberg) -- Most Read from BloombergRussia Can't Replace the Energy Market Putin BrokeFed Set to Shrink Rate Hikes Again as Inflation SlowsAdani's...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Business