Autoliv shares boosted as activist Cevian buys stake

STOCKHOLM, March 2 (Reuters) - Shares in Sweden's Autoliv , the world's biggest maker of airbags and seatbelts, rose on Friday after activist investor Cevian Capital disclosed a stake worth around $850 million and blessed the company's demerger strategy.

Cevian, whose portfolio includes large positions in European blue-chips such as ABB, Ericsson and Thyssenkrupp, said late on Thursday it had a holding in Autoliv corresponding to 6.9 percent of the outstanding shares.

Autoliv shares rose a much as 3.4 percent in early trade in Stockholm, and were up 1.8 percent at 1000 GMT compared with a 2.4 percent drop in the STOXX Europe Automobiles & Parts Index.

The company said last year it was planning to split into two listed companies, with one focused on high-tech safety gear suchs as radar products and vision systems to target growth related to advances towards self-driving vehicles.

Autoliv has also been winning new business for products such as airbags and seatbelts from Japanese rival Takata, which has been at the centre of the auto industry's biggest-ever recall and filed for bankruptcy last year.

"Autoliv has built an impressive position in automotive safety systems, including an attractive product portfolio in active safety and autonomous driving," Cevian co-founder Christer Gardell said in a statement.

The group makes radar products, vision systems and advanced driver assistance software in its Electronics business, which will be named Veoneer.

Its Passive safety business, which includes airbags and seatbelts and currently generates the bulk of company earnings, will retain the Autoliv name.

"We support the decision to separate the Electronics business, named Veoneer, and are convinced that both Autoliv and Veoneer have strong potential for further value creation," Gardell added.

With around $16 billion under management, Cevian prides itself on working with company management, eschewing the more aggressive tactics of Wall Street activists. It looks to influence from within, often seeking board positions at the businesses in which it invests.

In January, Autoliv reported fourth-quarter earnings above expectations, and forecast underlying sales would grow faster than analysts' expect in 2018 as it starts to deliver on the order boom of recent years.

"This is an extremely well-run company, with strong cashflow and good profitability," said Handelsbanken Capital Markets analyst Hampus Engellau, who has an "accumulate" rating on Autoliv.

"But Cevian seem to be viewing this in the same way that we do, that this split is not fully discounted and that further value will be created."

(Reporting by Johannes Hellstrom Editing by Keith Weir)