Saab Group’s decision to purchase — as part of its acquisition of Ericsson Microwave Systems — the 40 percent of Saab Ericsson Space it does not already own was driven by defense-technology factors and is unlikely to have any immediate effect on the newly named Saab Space’s business, Saab Ericsson Space President Bengt Mortberg said.
Ericsson’s 40-percent share of Saab Ericsson Space has been housed in the company’s microwave systems division, a business devoted mainly to defense technologies, particularly radars. It is the defense business, especially the expected benefits of the Saab-led Gripen fighter jet, that drove the purchase, which was valued at 3.8 billion Swedish krona ($521 million).
Saab Ericsson Space reported revenues of about 75 million euros ($94.8 million) in 2005 and has a current backlog of about 80 million euros, Mortberg said in a June 16 interview. The company has 530 employees including its staff at Austrian Aerospace of Vienna, a Saab Ericsson Space division.
Mortberg said placing the company wholly inside Saab should result in synergies, but that any layoffs would be few and probably compensated by the hiring program Saab Ericsson already has begun to handle its growing orders.
Anke Svensson, Saab AB chief executive, said in a June 12 statement that “we now can become even more efficient and the daily work of our employees will become less complex with only one owner.”
The company expects modest growth in the next year or two, with much depending on the speed of development of European government space programs.
Saab Ericsson Space’s business is evenly divided between commercial and government orders, a fact that sets the company apart from many European space-hardware subcontractors. The Gothenburg, Sweden-based company builds frequency converters and receivers for satellites and separation systems for launch vehicles.
Mortberg said the satellite business accounts for 85 percent of the company’s annual revenues despite Saab’s position as provider of payload-separation system for several commercial launch vehicles in the United States, Europe and Russia.