Japan's SoftBank Is Said to Eye $9.6 Billion Stake in Swiss Re

(Bloomberg) -- SoftBank Group Corp. is edging closer to a deal to buy a stake in Swiss Re AG that would value the reinsurer at as much as 37 billion Swiss francs ($39 billion), according to people with knowledge of the matter.

Billionaire Masayoshi Son’s SoftBank is holding talks to buy a 25 percent stake at about 100 Swiss francs to 105 Swiss francs a share, the people said, declining to be identified as the deliberations are confidential. At 105 francs apiece, the deal would represent a 16 percent premium over Swiss Re shares’ close on Feb. 7 -- before the company confirmed a Wall Street Journal report that it was in talks -- and value the holding at about $9.6 billion.

The terms of the potential deal are still fluid and may change, or the companies may fail to reach an agreement, the people said. Swiss Re rose 1.3 percent to 95.16 Swiss francs Wednesday.

SoftBank declined to comment. A Swiss Re representative wasn’t immediately available to comment.

The acquisition would buttress the finances of Son’s Japanese mobile-phone carrier with healthy cash flows from reinsurance in a move that mirrors the actions of business titans including Warren Buffett, who is transforming his company into a technology investor. SoftBank has raised $93 billion out of a planned $100 billion for the world’s biggest private equity pool, while taking stakes in businesses including ride-hailing, chipmaking and office sharing.

Insurance Deals

The $500 billion reinsurance industry is experiencing a flurry of dealmaking as companies come on the market after a rash of natural disasters depressed valuations and an influx of competitors made it harder to raise rates. France’s Axa SA this month agreed to buy XL Group Ltd. for $15.3 billion in cash to capture a bigger slice of the U.S. property and casualty market, while American International Group Inc. in January decided to buy the Bermuda-based reinsurer Validus Holdings Ltd. for $5.56 billion in cash.

Swiss Re’s chief executive officer last month said the company would welcome a long-term investor. In a business where results can change radically from one year to the next, “it’s not a bad thing to have an anchor shareholder,” Christian Mumenthaler said at a conference in Zurich.

The reinsurer last month said it plans to raise its dividend and return an additional $1 billion to shareholders. The Zurich-based insurer has hoarded money in recent years when there were relatively few disaster claims.

--With assistance from Patrick Winters

To contact the reporters on this story: Manuel Baigorri in London at mbaigorri@bloomberg.net, Dinesh Nair in London at dnair5@bloomberg.net, Jan-Henrik Förster in Zurich at jforster20@bloomberg.net.

To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Dale Crofts at dcrofts@bloomberg.net, Michael Hytha

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