Cathay may buy United World bank with a share swap

A race to acquire the United World Chinese Commercial Bank (世華銀行) may be over, as Cathay Financial Holding Co reportedly offered to exchange shares of its stock to acquire Taiwan's tenth-largest lender, local media said yesterday.

Cathay plans to offer NT$24 per share in a stock swap to merge United World into its family of businesses, a Chinese-language economic daily reported, without citing sources. United World shares ended trading at NT$23.6 on Friday. Officials from both companies were not immediately available for comment.

The deal was agreed to on Friday by chairmen from both companies, the paper reported.

Cathay's largest rival in bidding for United World, the Fubon Financial Holding Co (富邦金控), paved the way for the deal by last week announcing the purchase of TaipeiBank for NT$80.3 billion (US$2.4 billion). That deal will make Fubon the ninth-largest financial group in Asia by market value and Taiwan's biggest commercial bank.

Fubon, Cathay and CTB Financial Holding Co (交銀金控) had all been looking to acquire United World before Fubon purchased TaipeiBank instead.

Cathay, owner of the nation's largest life insurer already holds an 11 percent stake in United World. The deal will add 70 banking branches and seven offices overseas to its financial empire. The government owns 27 percent of United World and Fubon is believed to hold 13 percent of its shares.