Swiss Re in talks with SoftBank, Japanese firm could take minority stake

ZURICH/TOKYO (Reuters) - Swiss Re is in preliminary talks with Japan's SoftBank Group <9984.T> on a potential minority investment in the Swiss reinsurer, the Zurich-based group said on Wednesday, in a deal reported to be worth $10 billion or more.

"Swiss Re informs that it is engaged in preliminary discussions with SoftBank Group Corp regarding a potential minority investment in Swiss Re," the world's second largest reinsurer said.

The deal under discussion is for the purchase of up to a third of Swiss Re's shares at a premium, the Wall Street Journal reported earlier, citing sources familiar with the matter. [nFWN1PX1FX]

 

Such a deal would make SoftBank the largest investor in the reinsurance group at a time when chief executive Masayoshi Son is moving to transform the telecoms company he founded into one of the world's largest technology investors.

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 said, citing people familiar with the matter.

A SoftBank spokesman declined to comment.

On Wednesday, SoftBank said it was planning to raise further funds that could be used to shore up its finances or to make further investments by listing its domestic telecoms unit. Local media estimated the proceeds at $18 billion. [nL4N1PX2HS]

SoftBank last year raised more than $93 billion to create the Vision Fund, the world's largest private equity fund, and by the end of December had invested $27.5 billion in 20 tech firms through its investment arm.

The group's total interest-bearing debt at the end of December was 15.8 trillion yen ($144.5 billion) and Masayoshi Son said on Wednesday he wants to keep debt levels below 3.5 times earnings before interest, taxes, debt and amortization. That ratio stands at 2.8 times currently.

Swiss Re's shares last traded at 90.18 Swiss francs, giving it a market capitalisation of 31.51 billion francs ($34 billion).

Swiss Re's largest shareholder is BlackRock Institutional Trust Co with a 5.02 percent stake, according to Thomson Reuters Eikon data.

"Discussions are at a very early stage. There is no certainty that any transaction will be agreed, nor as to the terms, timing, or form of any transaction," Swiss Re said.

SoftBank shares fell 1 percent in early morning trading in Tokyo, compared with a rise of just under 1 percent in the benchmark Nikkei 225 index <.N225>.

($1 = 0.9443 Swiss francs)

($1 = 109.3500 yen)

(Reporting by Brenna Hughes Neghaiwi in Zurich, Sam Nussey in Tokyo; Additional reporting by Pallavi Dewan; Editing by Alexander Smith and Richard Pullin)