Japanese technology group Softbank planned to buy a significant stake in reinsurer Swiss Re. Why have the months-long negotiations failed?
Since early this year, Swiss Re and Tokyo-based Softbank have been negotiating a stake in the Swiss reinsurer. Softbank, which made its first foray into finance last year with the purchase of U.S. hedge fund Fortress, was reportedly eyeing new, tech-based sales avenues for Swiss Re’s insurance instead of insurance brokers, through other companies it is invested in, such as WeWork.
On Monday, the two admitted that the Japanese tech giant will no longer play a significant role. Swiss Re and Softbank, a technology conglomerate controlled by billionaire Masayoshi Son, confirmed discussions about potential minority investment have come to an end, in a statement on Monday.
Bigger Stake
Swiss Re will now continue to pursue the technology strategy on its own and with the help of third parties. In this context, Swiss Re may work together with companies from the Softbank conglomerate.
Originally the reinsurer had said that Softbank's offer was unlikely to go beyond 10 percent. Softbank, on the other hand, wanted more influence and looked to buy as much as a quarter of Swiss Re and also appoint three board members.
Missed Opportunity?
The end of these talks does not come as a surprise after the two had failed to reach a deal over several months, but it is a disappointment. With an investment from Softbank, Swiss Re would have had a chance to improve the access to the booming Asian market and deploy technology platforms. As things stand now, Softbank is unlikely to lend a hand with that.
