Cevian Capital Not Pushing Munich Re to Spin Off ERGO

FRANKFURT (Reuters) – Swedish activist investor Cevian Capital is not pushing reinsurer Munich Re (MUVGn.DE) to sell its ERGO (ERGG.DE) insurance business, Cevian founding partner Lars Forberg said in a newspaper interview.

“It’s good that I can make it clear: a split-off of ERGO is currently not an issue. We are not talking about it,” Forberg told German financial daily Handelsblatt in an interview published on Monday.

Cevian said in December last year it had bought a stake of nearly 3 percent in the world’s biggest reinsurer and has since said it is in constructive dialogue with Munich Re’s management.

“Munich Re is relatively strongly capitalised. One could use this position for add-on acquisitions if there were opportunities in the primary insurance market, which in this market environment is quite likely,” Forberg told the paper.

Prices for stock-exchange listed insurers had fallen but this was not the case for unlisted insurers, Forberg said.

“Still, there will be opportunities, whether we are talking about single portfolios or whole insurers,” he said.

Forberg said he agreed with Munich Re’s strategy of reducing capacity in less profitable areas of business and supported its stable long term-oriented dividend policy.

He declined to comment on whether Cevian would raise its stake in the reinsurer.

(Reporting by Jonathan Gould; Editing by Quentin Bryar)