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SoftBank May Acquire Up To One-Third of Swiss Re

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Swiss Re in February 2018 announced it was in preliminary talks with Japanese conglomerate SoftBank, which could end up owning up to one-third of the global reinsurer. The deal is valued at around USD 10 billion.

Other $10+ bn investments by SoftBank include Sprint (telecoms), ARM Holdings (microprocessors), Vodafone Japan (telecom), Didi Chuxing, Uber Technologies (both transportation); smaller investments in insurance include Lemonade.

As to the rationale behind the deal, apart from SoftBank’s “cash-drag” issue that pushes it to make acquisitions no matter what (SoftBank sits on a huge pile of cash that yields next to nothing, depressing the conglomerate’s overall rate of return), an investment in Swiss Re would yield a steady stream of cash to fund further acquisitions. Synergies with other group companies seem rather unlikely but that is not what conglomerates strive for anyway.

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