Japanese conglomerate in talks over Swiss Re minority stake

Japanese conglomerate in talks over Swiss Re minority stake

"Discussions are at a very early stage".

Swiss Re shares were trading at 94.00 Swiss francs ($99.4), up almost 4.2 percent on the news, as of 1030 GMT. SoftBank shares rose about 1 percent in Tokyo on Thursday. It is the world's second-largest reinsurer.

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.

If Swiss Re were to agree to SoftBank's approach, it has the capacity to issue up to 135 million new shares without seeking approval from existing shareholders, who could potentially be blocked from buying the first 70 million new shares, according to the company's articles of association.

Swiss Re said it is in preliminary talks to sell a minority stake to SoftBank Group - a deal that reportedly could be worth $10 billion or more, in what would be the Japanese firm's biggest financial services deal to date. "There is no certainty that any transaction will be agreed, nor as to the terms, timing, or form of any transaction", the reinsurance giant said in a press release.

SoftBank, which has declined to comment on the possible deal, has been engaged in aggressive spending over the past year. Recently, however, the industry has faced some major challenges. Hedge-fund managers from David Einhorn to Dan Loeb have also started reinsurers in recent years. But it said expected a rise in insurance premiums, especially in disaster-hit areas, would help it recover. The company serves clients through a network of around 80 offices globally. Getting into insurance in a disruptive way, like their acquisition of Lemonade which uses AI to accelerate claims processing does make sense, but not traditional reinsurance.