The scrapping of the nation's first merger between two financial holding companies -- Taishin Financial Holding Co (台新金控) and Shin Kong Financial Holding Co (新光金控) -- was a wise decision, one economist said yesterday.
"The merger plan shouldn't have been implemented just for the sake of consolidation," said economist-turned-lawmaker Thomas Lee (
The merger plan was officially aborted late Wednesday, eight days after its initiation.
Interestingly, the deal was a family affair between two brothers: Taishin Financial's Chairman Thomas Wu (
Thomas Wu decided to scrap the deal after Eugene Wu earlier on Wednesday revised Shin Kong Financial's profit forecast for the year downward, from an initial NT$3.96 billion gain to an after-tax loss of NT$8.82 billion.
Moreover, Shin Kong Life Insurance (
The total market value for the three Shin Kong buildings are estimated to be at least NT$15 billion, according to local Chinese-language newspapers.
Shin Kong Financial's financial problems apparently rattled Taishin Financial's confidence in the merger plan and both companies' stock performance during the past few days, said William Fong (方偉昌), a banking analyst at PrimAsia Securities Co.
"As declining interest rates are hurting Shin Kong Life's ability to pay the higher returns that were guaranteed by policies which were sold earlier, the recent stock development has placed Shin Kong in a disadvantageous situation," Fong said.
Fong said the move to temporarily halt the merger plan is positive for both companies.
"The timing for such a merger may not be ripe yet. Both of them need to think about the planned merger one more time," Fong said.
Shares of Taishin Financial and Shin Kong Financial rose slightly yesterday by NT$0.4 and NT$0.3 to close at NT$17.9 and NT$14.6, respectively, signaling investors' positive reaction to the decision.
A Shin Kong Financial official said yesterday that the company wants to continue communicating with Taishin about the merger plan.
"There may still be room for cooperation. We'll make the final decision that is in the best interests of the shareholders," Shin Kong spokesman Lu Jung (
But Taishin was pessimistic about Shin Kong's sale of properties, saying the return may not cover losses, considering the current sluggish state of the real estate market.
The local media had therefore speculated that the merger plan was dead in the water since both sides disagreed on several issues.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS