The investors are wondering who will control Alfa Laval

Two of the most affluent families in Sweden, the Rausings and Wallenbergs, have been acquiring shares in Alfa Laval (OMX: ALFA). Rausings are best known from liquid food packaging company Tetra Pak and renowned banking family Wallenberg boast Europe’s largest family-controlled business empire. At the height of its powers, Wallenberg family has been estimated to have controlled a third of Sweden’s GDP through its various holdings.

Alfa Laval was part of Tetra Pak group (the group subsequently became known as Tetra Laval) from 1991 to 2000 and Tetra Laval remained a financial investor after selling the majority to Industri Kapital (IK Investment Partners). Industri Kapital exited Alfa Laval in 2005. Ever since Tetra Laval’s ownership share in Alfa Laval has been relatively stable at somewhat under 20%.

After Wallenberg foundation owned Foundation Asset Management (FAM) flagged over 5% ownership in Alfa Laval this August, something changed. Suddenly Tetra Laval has started to buy more, and in a recent flagging already owned over 25% of the shares in Alfa Laval. FAM has also continued its purchases and in most recent update on November 30th held 6% of the shares.

Swedish press is calling the situation an ongoing power struggle. Some speculate Rausings would try to avoid a situation where Wallenberg's own more than 10% of shares, which would make the able to stop a potential takeover. Tetra Laval’s CEO Jörgen Haglind scoffs at such theories and says the reason behind more purchases is that the company views the new purchases as “sound and solid financial investments”. FAM’s comments mirrored those sentiments, saying that Alfa Laval is a well managed global company with attractive growth prospects. FAM is also planning to be a long-term investor and feels that Alfa Laval fits well in its portfolio of holdings.

Alfa Laval is active in heat transfer, separation and fluid handling technologies. The stock is very cyclical, yet it is up 30% since the beginning of October. In November the company announced a new organization consisting of three selling organizations in its capital markets day. This week Alfa Laval won an order worth 85 million SEK to supply engineering and equipment to Indonesia to an edible oil company.