Softbank wants to become an active shareholder in Swiss Re with reported plans to buy up a sizable chunk of the reinsurer. A look at why UBS' Sergio Ermotti cares about the proposed deal.
The Japanese technology conglomerate would have to pay as much as $10 billion for 30 percent in the world's second-largest reinsurer. And for that amount, Softbank expects to get several seats on the board of directors, the «Financial Times» (behind paywall) reported.
Swiss Re at the beginning of the month announced it was holding preliminary talks with the Japanese company about its plans to buy a stake in the Swiss company.
Softbank CEO Masayoshi Son and Swiss Re Chairman Walter Kielholz are slated to meet in coming weeks to continue the discussions. Son is Japan's richest man with assets worth about $20 billion. He founded Softbank in 1981 with a loan of $1 million and steered the company through the dotcom crisis to reach a market cap of some $80 billion.
Swiss Advisers
Intriguingly, UBS boss Sergio Ermotti has met personally with Kielholz in Zurich. Why? Switzerland's largest lender has landed a mandate to advise Softbank on the deal, according to the newspaper. Meanwhile archrival Credit Suisse is advising the reinsurer.
SoftBank reportedly wants to sell Swiss Re’s insurance by using technology, not insurance brokers, through other companies that the Japanese firm is invested in, such as We Work. The Japanese firm's roots are in mobile phones, but it has branched out with stakes in everything from Uber and Alibaba to British software giant Arm as well as U.S. private equity investor Fortress.
