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Swiss Re says SoftBank stake unlikely to exceed 10%, talks at early stage

Frankfurt

JAPAN'S SoftBank is in talks to buy a stake in Swiss Re that is unlikely to exceed 10 per cent, the reinsurer said on Wednesday, adding that discussions were at an early stage.

Bloomberg reported on March 29 that Softbank was looking to buy a 25 per cent stake in Swiss Re, worth about US$9.6 billion, as part of its drive to broaden its investments, which include its US$93 billion Vision Fund for technology projects.

Chief executive Christian Mumenthaler sounded enthusiastic about the prospect of a deal, citing SoftBank's ties to China, focus on technology and access to 800 million customers. "This is not uninteresting," he said during a conference call with journalists.

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Swiss Re also reiterated that it was not considering issuing new shares for the possible investment by the Japanese company. The Swiss company's finance chief said SoftBank would be likely to buy any shares on the open market. The reinsurer said the investment was "currently expected not to exceed 10 per cent" and the two companies were also exploring strategic cooperation.

Swiss Re emphasised that talks were preliminary. "There is no certainty that any minority investment or strategic partnership will be agreed, or as to any terms, timing, or form of any such investment or partnership," it said. Analysts have said SoftBank could be attracted by Swiss Re's research capabilities, undervalued stock, and cash generation. Softbank declined to comment.

Swiss Re "appears well prepared for the ongoing technological changes by actively working on platforms and ventures", Vontobel Research said in an investor note.

SoftBank plans to offer Swiss Re's insurance products directly to users of other companies it has invested in, such as Uber and WeWork, the Wall Street Journal has reported, citing people familiar with the matter.

SoftBank founder Masayoshi Son has said he wants to build a group of industry-leading companies that, powered by technological advancements in artificial intelligence and interconnected devices, will endure for 300 years.

Through its investment arm centred on the Vision Fund, the world's largest private equity fund, SoftBank has already funnelled US$27.5 billion into tech firms around the world. That could bring a huge number of potential insurance customers - from ride-share drivers to dog-walking app users - into what Mr Son calls his "synergy group" of companies. REUTERS