Softbank pulls the plug on Swiss Re stake talks

Oliver Gill
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Softbank and Swiss Re announced they were in talks in February (Source: Getty)

Talks over Softbank's eyebrow-raising investment into reinsurance titan Swiss Re have broken down, it was announced today.

In February it was announced the duo had "engaged in preliminary discussions" over the Japanese tech fund taking a minority stake in Swiss Re.

Today, Swiss Re said it "will continue to implement its technology strategy with a combination of in-house developments and third-party collaborations".

"In this context, the company will also further explore business ideas between Swiss Re's operative entities and the portfolio companies of SoftBank," it said.

Read more: Softbank raises eyebrows with talks to buy a slice of Swiss Re

Analysts questioned the February talks, saying an investment in a "traditional" insurer was at odds with Softbank's usual strategy of backing disruptive players.

Mirabaud Securities global thematic co-head Neil Campling he "didn't quite get" the plans.

Softbank has a $100bn Vision Fund and is keen to put the capital to task. It released its annual results earlier this year, posting net sales of more than 9 trillion yen (£63bn), up three per cent on the previous year.

Campling said:

Softbank is supposed to be more a tech visionary business and not a conglomerate. 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.

"Investing in an overcapitalised industry that has no obvious synergies with any of the other holdings can only lead to an even greater discount to the value of its holdings - because it will result in a clear general industry conglomerate, not a leading tech visionary company."

Read more: SoftBank sells entire stake in Indian retailer Flipkart to Walmart





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