Sweden to sell off State holdings in firms

Sweden's new government plans to send the Nordic country in a radically new economic direction by putting business at the centre of the policy agenda and substantially reducing the role the state plays in the economy.

It has pledged to sell the government's stakes in listed companies, spin off holdings in unlisted state-controlled firms and open large parts of the economy to private sector competition.

The centre-right Alliance for Sweden ousted the Social Democrats after 12 consecutive years in power on Sunday.

Alliance's plans clear the way for a period of significant corporate restructuring, rapid changes to the private and service sectors and may also spur a bout of mergers and acquisitions.

Mikael Ericson, head of Handelsbanken capital markets, said the election sent out an important message about corporate Sweden. "It is natural for Sweden to open up further and take part in European and global competition," he said.

The new government's policy is expected to involve a three-stage period of privatisation and deregulation over the next three to five years, bankers said.

The first stage involves the sale of the government's stakes in listed companies, then the sale of unlisted state-owned firms and, lastly, the possible sale of public service companies.

The first stage will involve the sale of 20 per cent of Nordea, the Nordic region's largest bank, 45 per cent of TeliaSonera, the telecommunications company, 7 per cent of OMX, the stock market operator, and 20 per cent in SAS, the airline.

Fredrik Reinfeldt, prime minister elect, has not committed to a timetable for the sales but said they will go ahead only when the best price can be obtained. They have a combined market value of about 150 billion Swedish krone (€16.3 billion).

Carl Bildt, a former prime minister and leader of Moderaterna, the main party in the Alliance, told the Financial Times: "We need to do with the service sector what we did with the private sector in the 1990s."

He was referring to the deregulation of the banking, telecommunications, retail and automotive sectors in the 1990s that created some of the country's most powerful companies, such as Ericsson and Volvo.

Tom Berggren, managing director of the Swedish Venture Capital Association, said: "[ The Alliance] has given clear feedback that they really understand what business is all about." - (Financial Times service)