The boards of directors of Fuhwa Financial Holding Co (
The merger deal would allow for the exchange of one Yuanta share for 1.615 Fuhwa Financial shares, they said.
The two companies will seek their shareholders' approval of the merger in separate extraordinary general meetings on Dec. 28, according to a joint statement filed to the Taiwan Stock Exchange yesterday.
Yuanta Core Pacific, the nation's largest brokerage firm, will become a 100 percent owned subsidiary of Fuhwa Financial and be delisted from the local exchange after the share swap takes effect on April 2.
Yuanta Core Pacific will then merge with Fuhwa Securities Co (
The firms will decide which will be the surviving entity in April or May next year, according to the statement.
The merger will make the new entity the largest brokerage with an 11.63 percent market share and the leader in margin trading with a more than 20 percent market share, the statement read.
Aided by Yuanta Core Pacific's securities business, Fuhwa Financial would also be able to pursue its objective of developing its investment banking business, the statement said.
The company will take advantage of Yuanta Core Pacific's foothold in Southeast Asia to promote internationalization, it added.
The merger would lift Fuhwa Financial's capitalization to NT$83.12 billion (US$2.53 billion), ranking it fifth among the nation's 14 financial holding firms. It would also raise its net worth to more than NT$100 billion, placing it seventh in the country.
During a shareholders' meeting in September, Yuanta Core Pacific, which has a 45 percent stake in Fuhwa Financial along with its supporters, grabbed six out of nine board seats and two of three supervisory positions in Fuhwa Financial.
Another major shareholder, Central Investment Holding Co (
The Bank of Taiwan (台灣銀行), which holds a 13 percent stake on behalf of the government, obtained one board seat and one supervisory spot.