John Dacey, Swiss Re Group Chief Financial Officer; Source: Swiss Re
4 May 2018Insurance

Swiss Re CFO coy on potential talks with investors other than SoftBank

The chief financial officer of Swiss Re has refused to deny that the reinsurer is in talks with companies other than SoftBank in relation to selling a stake in the company.

The discussions with SoftBank to acquire a stake in Swiss Re may not be exclusive and there might be discussions with other potential acquirers ongoing, Swiss Re chief financial officer John Dacey suggested during the reinsurers’ first quarter 2018 results conference.

In February 2018 Swiss Re confirmed it is in talks with Japanese conglomerate SoftBank Group regarding a potential minority investment in the reinsurer.

More recently, rumours emerged that the talks have come to a standstill, as reported in a Bloomberg May 2 news article citing “people familiar with the matter”.

The two sides reportedly disagree on the price and size of the stake and how much management control would be handed to Softbank founder and CEO Masayoshi Son.

The negotiations have moved forward “in terms of time, not in terms of particular progress,” Dacey said. He explained that he would not like to give the impression that “we are closer or that we are near some inflection point here”.

He added: “We would welcome an important shareholder that is interested in a long-term stake in Swiss Re but we don’t feel that we need one and we think, most importantly, we want to make sure that we treat the existing shareholders of Swiss Re fairly in any sort of transaction that might occur,” Dacey said.

With regards to the rationale of a potential deal with SoftBank, Dacey noted that the company has a number of subsidiaries that have an “enormous number” of clients and Swiss Re is in discussions with companies like those subsidiaries to see where it is that the reinsurer might be able to assist the delivery of risk-bearing products and insurance products.

“The question is strategically, is there an opportunity for us to work with these companies more closely to find ways to assume risks in the businesses that they operate,” Dacey said.

While the negotiations with SoftBank continue, Dacey said that the outcome is “open in all directions,” and he did not reject questions asking specifically if the stake purchase negotiations with SoftBank are exclusive during the call.

“Those discussions are normal both with large corporate groups that might or might not be clients of corporate solutions as well as with potential partnerships for some of the other initiatives we’ve got inside of the company,” Dacey said.

Facing the question if Swiss Re is talking exclusively with SoftBank as a potential investor or also with other large groups, Dacey did not deny the possibility of parallel discussions.

“We acknowledge that we are in discussions with SoftBank, those discussions are continuing and I really wouldn’t want to speculate or hypothesize on other discussions that might or might not be occurring,” Dacey said.

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More on this story

26 February 2018   Swiss Re CEO Christian Mumenthaler hinted at the benefits of a potential deal that would see Japan’s SoftBank acquiring a stake in the reinsurer during the full-year 2017 results presentation.
4 May 2018   Swiss Re enjoyed strong growth in the first quarter driven by its L&H Re and in Life Capital units but its profits were effected by a change in US GAAP accounting covering guidance on recognition and measurement of equity investments, which meant it took a $280 million hit to its net profit.
28 May 2018   Swiss Re and SoftBank Group have agreed to end discussions about a potential minority investment of SoftBank in Swiss Re.