Swiss Re Ltd. announced that they are conducting preliminary talks about combining its Admin Re business with Phoenix Group Holdings.
The Swiss based reinsurer said in a statement today, "There is no certainty that these discussions will lead to any transaction."
Swiss Re released an announcement in February that it had "work to do" in relation to Admin Re. Admin Re is a unit of Swiss Re that manages closed life insurance funds. Phoenix Group, said that if talks are deemed successful, Swiss Re will take a minority shareholding in Phoenix as payment for the deal.
Zurich-based analyst for Vontobel Holding AG, Stefan Schuermann commented, "This is good news for Swiss Re. The more capital they can take out of Admin Re, the better."
Analysts are saying that the forecasted amount of the merger would be in the area of US$4.6 billion or GBP3 billion.
Swiss Re reported a US$1 billion loss for the second quarter of 2012 after agreeing to sell its US Admin Re holding company for GBP398 million to Prudential Plc. At the time of the sale, the Swiss Re said that the transaction helped the company to unlock capital to use across the group which boosted the equity and earnings per share as well as net worth growth targets.
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