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Rumors confirmed: Swiss Re in talks to sell a minority stake to SoftBank

Swiss Re confirmed it is in talks to sell a minority stake to Japanese multinational telecommunications corporation SoftBank Group.

Swiss Re informed in a statement "that it is engaged in preliminary discussions with SoftBank Group Corp. (SoftBank) regarding a potential minority investment in Swiss Re. Discussions are at a very early stage".

The reinsurers' representatives pointed out that there is no certainty that any transaction will be agreed, "nor as to the terms, timing, or form of any transaction".

Financial media wrote that the deal would involve an investment of worth USD 10 billion or more and would mark "Japanese company's biggest move yet into financial services", according Reuters.

The figures represents about one third of the Swiss reinsurer, as reported by the Wall Street Journal.

Analysts said SoftBank could be attracted by Swiss Re's research capabilities and undervalued stock, while the company's cash generation could prove attractive, wrote Reuters.

"Swiss Re has a strong balance sheet and pays a high dividend yield - above 5 percent - which I think they can keep up," Stefan Schuermann at Bank Vontobel in Zurich said.

At the same time, 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 report said.

Over time, SoftBank has made other investments the insurance industry, and has stakes in Chinese online insurer ZhongAn, health insurance claim processing service Ping An HealthKonnect set up by Ping An Insurance Group, and US insurance startup Lemonade.

Published on 13.02.2018

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