FRANKFURT - U.S. investor Warren Buffett has become the biggest single shareholder in the world's largest reinsurer Munich Re and could soon hold 7 percent of the company.

Buffett had raised his voting stake in the company to 5.073 percent as of February 4, Munich Re said on Friday.

He is already a global player in reinsurance through his Berkshire Hathaway Inc unit and his 3 percent stake in the world's second biggest reinsurer Swiss Re.

Munich Re had earlier announced that Buffett also held options potentially giving him a further 1.945 percent stake in the company. The exercise date for the options is March 11.

Buffett's move catapults him past the previous largest shareholder, fund manager Blackrock, which owns a stake of around 4.6 percent.

Munich Re's Chief Financial Officer Joerg Schneider said last week he did not see Buffett as a competitor nor his stake holding as hostile.

Analysts have said they see Buffett's holding as strictly financial in a sector he knows well. Buffett's representatives have declined to comment.

Munich Re had traded at a discount to Swiss Re in the second half of last year but now trades at 8.7 times 12-month forward earnings, compared with Swiss Re's multiple of 7.9 times, according to Thomson Reuters StarMine, which weights analysts' forecasts according to their track record.

Buffett's purchases have helped underpin Munich Re's shares. Over the last month, the stock has fallen by just 0.4 percent, compared with an 8 percent decline in the DJ Stoxx European insurance index .SXIP.

Munich Re's shares were up 0.5 percent at 108.50 euros by 1313 GMT (8:13 a.m. EST), compared with a 0.5 percent decline in the insurance index.

(Reporting by Jonathan Gould; Editing by Erica Billingham)

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