Chang Hwa Commercial Bank (
The lender made the announcement in a filing with the Taiwan Stock Exchange, following a board meeting earlier in the day.
Chang Hwa also authorized its chairman, Lee Yung-san (
Taishin Financial, which now owns 22.5 percent of Chang Hwa, plans to acquire the remaining stake in Chang Hwa, the nation's eighth-largest bank by assets, through a share swap before the end of the year.
The merger would create the nation's second-largest financial holding company by assets.
The government, which owns 15.7 percent of Chang Hwa, is encouraging domestic banks to consolidate to improve earnings.
"The ministry has said it will support the board's decision or resolution as long as it doesn't hurt the interests of shareholders," the Ministry of Finance said in a statement on its Web site on Thursday.
Meanwhile, Taishin Financial said its board has approved the selection of Lehman Brothers Holdings Inc as its lead and Nomura Holdings Inc as a co-lead to advise it on the deal, company spokesperson Carol Lai (賴昭吟) said by telephone last night.