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(Bloomberg) -- Peter Wallenberg Sr., who for 15 years dominated Swedish industry and enlarged the family’s control over companies such as Ericsson AB and Electrolux AB, has died. He was 88.

“It is with deep regret that the board of directors of the Knut and Alice Wallenberg Foundation announce that its Honorary Chairman, Peter Wallenberg, has passed away peacefully at his home,” the family said in a statement today.

The patriarch of the “Wallenberg Sphere,” as the family’s holdings are known in Sweden, oversaw the merger of assets and the creation of companies, through his chairmanship of holding company Investor AB. He helped establish Swiss-Swedish engineering firm ABB Ltd. in 1988, Finnish-Swedish forestry company Stora Enso Oyj in 1998 and Anglo-Swedish drugmaker AstraZeneca Plc in 1999.

“He could have rested on the extraordinary laurels of his family, but he chose to build and create,” former U.S. President George H.W. Bush said of Wallenberg, according to David Bartal’s 1996 book “The Empire: The Rise of the House of Wallenberg.” “He is a man of enormous competence and dimension.”

The Wallenbergs are among Europe’s most powerful private industrial dynasties. When Wallenberg stepped down as chairman of Investor in April 1997, its net asset value had soared to 78.9 billion kronor by the end of 1996 from 1.8 billion kronor a decade earlier, according to company data.

Family Ties

Investor was founded by the Wallenbergs in 1916 as new Swedish legislation made it more difficult for banks to be long- term owners of shares in industrial companies. Stocks held by the Wallenberg family bank, today’s SEB AB, were transferred to the newly formed industrial holding company.

The Wallenberg foundations, the central pillar of the family, control 50 percent of the votes and 23 percent of the share capital of Investor AB. The Knut and Alice Wallenberg Foundation was named after Knut Wallenberg, who was born in 1853 and was Sweden’s foreign minister during World War I.

When Peter Wallenberg became chairman of Investor in 1982, it held only smaller stakes in some of Sweden’s biggest exporters. To boost the family’s control over the businesses, Wallenberg increased their voting rights by buying vote-rich A- class shares and selling B-shares they owned. Wallenberg sold new stock in Investor twice in the early 1990s to raise cash.

Swedish Shareholdings

Wallenberg’s role gave him sway over major decisions taken by the companies under Investor’s control, which in 1988 included Stora AB, Electrolux, power-network maker Asea AB, ball-bearings maker SKF AB and Wallenberg family bank SEB.

Wallenberg was born on May 29, 1926, in Stockholm to a Scottish-born mother, Dorothy Mackay, and Marcus Wallenberg. He was one of three children.

Wallenberg was not meant to head Investor. His older brother Marc was instead groomed to take over. While Marc was placed at the family’s in-house bank, Peter Wallenberg was set up for a role in the dynasty’s industrial operations.

After earning a law degree from Stockholm University in 1949, he started working for Atlas Copco in 1953, a mining- equipment company that the Wallenbergs controlled. He spent a few years in the U.S. and in Africa working for Atlas Copco before becoming the head of its U.K. operations.

Brother’s Death

When Marc committed suicide in 1971, Wallenberg was suddenly first in line to lead the family companies. His brother’s death had a deep impact on Wallenberg.

“Marc and I were very close,” he told Sydsvenska Dagbladet newspaper in 2006. “I didn’t see what was coming, despite sitting talking to him two hours before he took his life. It was a big misfortune and I felt a terrible emptiness.”

Wallenberg was called home from London and became an industrial adviser at SEB. While people within the sphere doubted that he had the skills and knowledge required, according to Wallenberg himself, he eventually succeeded, partly as a result of the lack of faith people had in him.

“The doubt did me a big favor,” Wallenberg told Sydsvenska Dagbladet in the 2006 interview. “To hear that I was worth nothing every day boosted my competitive instinct.”

Wallenberg’s rise to the top within the sphere was concluded when his father died in 1982 and he became the chairman of Investor. Wallenberg won praise for his leadership skills, including his ability to recruit top-class managers and open doors with his contacts around the globe. At the same time, he was often embroiled in controversy, whether it involved political issues or bonus payments.

In 1994, Wallenberg said companies may be forced to leave Sweden depending on the outcome of the election and politicians’ ability to get public finances in order, a veiled threat given Investor’s hold on domestic industry.

Wallenberg was also criticized for paying out too much in bonuses to Investor board members and for signing a generous pension agreement with the then chief executive officer of ABB, Percy Barnevik.

Wallenberg married three times. His son Jacob became chairman of Investor, while his youngest son, Peter, had a seat on Investor’s board.

--With assistance from Benedikt Kammel in Berlin.

To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net To contact the editors responsible for this story: Tasneem Hanfi Brogger at tbrogger@bloomberg.net; Charles W. Stevens at cstevens@bloomberg.net David Henry, Kim McLaughlin

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