Reinsurance News

Swiss Re ends SoftBank talks with no agreement

28th May 2018 - Author: Steve Evans

Global reinsurance group Swiss Re has announced that it has ended discussions about a minority stake investment with Japanese technology & telecoms investor & conglomerate SoftBank.

Swiss Re SoftBank

The pair have been in discussions about SoftBank acquiring a stake in Swiss Re since February.

At first it was reported that SoftBank would look to take around a 25% share of Swiss Re’, but the reinsurer later said that it did not expect any agreement to involve more than a 10% stake in its share capital.

The size of the stake reportedly became a sticking point, with SoftBank founder Masayoshi Son said to be hoping for a larger stake in the firm, as well as more control.

It was then said that Swiss Re’s talks with SoftBank had stalled, which led the CFO of the reinsurance company to say that there is “no clear indication” that any deal will be struck and the pair are no closer to reaching agreement.

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Finally, SoftBank’s interest in the deal was said to be waning, as the discussions were said to be close to collapse.

Now, Swiss Re has announced that the discussions have come to an end, saying that, “Swiss Re and SoftBank Group Corp. have agreed to end discussions about a potential minority investment of SoftBank in Swiss Re.”

Swiss Re said that it will, “Continue to implement its technology strategy with a combination of in-house developments and third-party collaborations.”

However, suggesting lines of communication will remain open after this exploration of a more meaningful deal, Swiss Re added that, “The company will also further explore business ideas between Swiss Re’s operative entities and the portfolio companies of SoftBank.”

The deal had been cited as one where an investment by SoftBank could have been transformative for Swiss Re, at a time when the reinsurance industry has been facing profitability pressures.

Bloomberg reported this morning that a Swiss Re spokesperson said that the talks ended amicably and that Swiss Re remains open to approaches from other potential anchor shareholders.

Now, with the deal off the table, it will be interesting to see what other rumours emerge of re/insurance industry giants looking to partner in meaningful ways with more consumer and tech focused giants, such as SoftBank, as these tie-ups could offer significant benefits for both sides.

Integrating risk capital and risk transfer into a tech-driven, consumer focused, high-growth entity like SoftBank could be another step in the re/insurance industry’s transformation. It will be interesting to see if SoftBank looks to achieve this in another way now these talks are over.

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