As I have covered Softbank just recently (part 1, part 2 ) and as I consider Insurance companies to be somehow in my circle of competence, the news that Softbank wants to acquire 30% of Swiss Re for 10 bn USD of course sparked my interest.
The big question of course is: Why on earth would Masa Son do that ?
Looking at his vision statements, his vision is a connected world via the internet of things, lots of robots, smart AIs and a lot of computing power. So he is buying chip makers (ARM; Nvidia), data companies like Uber, mobile phone companies, robotic companies etc. So far so good, somehow this could fit together.
But a Reinsurance company ? WTF is that ?
A couple of days ago, I looked at Softbank more from a strategic point of view. This time I want to focus more on the actual assets and a sum-of-parts valuation
What is Softbank ?
Essentially the company at its core is a Telco company in Japan and US plus a lot of “extra assets” like the Alibaba stake, Yahoo Japan and then all the other stuff including the vision fund. The initial Software distribution business (this is where the name Softbank comes from) doesn’t play a big role anymore.
I will now try to walk through the major Softbank Assets in more detail:
- The Alibaba stake
Let’s start with the largest position first, the now so famous Alibaba stake. From a technical perspective, Softbank doesn’t own the listed shares but this: