Goldman Sachs Group Inc and Lehman Brothers Holdings Inc are getting less than half the minimum fees typically charged for arranging a US$3 billion Taiwanese banking merger, three people familiar with the terms of the deal said.
Goldman, the world's leading takeover adviser, accepted less than US$1 million for advising state-backed Chang Hwa Commercial Bank (彰化銀行) on its union with Taishin Financial Holding Co (台新金控), the people said, declining to be identified because the information is private.
Taishin Financial is paying Lehman Brothers Inc a similar sum, they said.
The nation's biggest financial merger in six years may help New York-based Goldman break into the top three takeover advisers in Asia outside Japan, from fourth now and sixth last year. Wall Street firms are competing for a smaller pool of fees in Taiwan this year, with one takeover of more than US$1 billion announced, from six last year, data compiled by Bloomberg shows.
"Fee competition in this market has been quite intense, so investment banks need to diversify and differentiate instead of relying on high-profile deals," said Peter Yu, managing director of Price-waterhouseCoopers LLP's financial advisory services in Taipei. "You can't expect to get a good fee with so much competition for mandates."
Citigroup Inc is the leading takeover adviser in Taiwan this year, followed by JPMorgan Chase & Co and Taipei-based Yuanta Core Pacific Securities Co (
Goldman, Lehman, Chang Hwa and Taishin Financial also declined to comment.
Goldman beat rivals including Morgan Stanley and UBS AG, who were initially seeking at least US$2 million for advising on the transaction, two people familiar with the matter said.
The fees Goldman and Lehman accepted may be the lowest for any multibillion-dollar merger in Taiwan, two of the people said.
Investment banks typically charge 1 percent of the transaction size on Taiwan deals of up to US$1 billion and demand a minimum US$2 million to US$4 million irrespective of deal size, said three bankers specializing in Taiwan mergers.
Advising on the merger may cost Goldman and Lehman less because it is prearranged.
Goldman didn't advise on any completed financial mergers in Taiwan between 2003 and last year, according to Bloomberg data. In 2002, the firm worked on the US$2.9 billion combination of International Commercial Bank of China (
That same year, Goldman also worked on state-owned Taipei Fubon Bank's (台北富邦銀行) US$2.4 billion sale to Fubon Financial Holding Co (富邦金控). The US firm earned more than US$5 million advising Taipei Fubon Bank, two people familiar with the deal said.
The government wants to sell Chang Hwa, in which it holds a 15.7 percent stake, to spur consolidation in the sector.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts