More than nine interested parties have expressed their interest in bidding for Nan Shan Life Insurance Co (南山人壽), sources said yesterday.
The wide interest in Nan Shan Life, which is 97.5 percent owned by the financially troubled American International Group Inc (AIG), is likely to drive its price up to nearly NT$80 billion (US$2.43 billion) from the US insurer’s floor price of US$2 billion, a source said.
The deal is expected to close in September.
PHOTO: Liao Chien-ying, TAIPEI TIMES
“Some of the interested parties may have formed joint ventures to submit a joint bid,” he said.
Among the contenders, Chinatrust Financial Holding Co (中信金控) is probably the most suitable candidate since it lacks an insurance subsidiary, an analyst who requested anonymity said.
Nan Shan has hired Morgan Stanley, which has a 4.01 percent stake in Chinatrust Financial, to arrange its sales, the analyst said.
“But I don’t think it will be a good deal if the price [for Nan Shan] closes at around NT$80 billion,” the analyst said.
Although Cathay Financial Holding Co (國泰金控) and Fubon Financial Holding Co (富邦金控) — already the two largest domestic life insurers — have both expressed an interest in Nan Shan, the analyst said the two were likely to back out because of the lack of synergy as well as the risk and cost of managing overlapping policyholders and agents from Nan Shan.
The analyst said potential buyers should “be aware” that purchasing Nan Shan would be the “easy” part, but managing it would be “difficult.”
He added that share dilution and possible layoffs of Nan Shan’s “costly” agents were two hot potatoes that would likely keep Fubon Financial and Cathay Financial out of the deal.
Nan Shan has a sales force of about 35,000 serving 4 million policyholders. It has 24 branches and 427 sales offices nationwide.
Other potential contenders include Ruentex Group (潤泰集團) and private equity (PE) funds such as Carlyle Group, Primus Financial Holdings Ltd, MBK Partners Ltd, KKR & Co and Affinity Equity Partners Ltd, the source said yesterday.
Local media speculated that Ruentex could team up Carlyle or BlackRock Inc to compete head-to-head with Chinatrust Financial.
However, Financial Supervisory Commission Chairman Sean Chen (陳冲) said the financial regulator “does not welcome PE fund buyers if they are aiming for quick gains [out of the deal]” rather than long-term holding.
But he added that not all PE funds were vultures and his commission would take the prospective buyer’s track record into consideration when reviewing their applications.
Although the banker-turned chairman doesn’t object to the idea of PE funds borrowing loans from local banks to buy up Nan Shan, he advised local banks to carefully evaluate the credit risk of extending such loans.
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co. (better known as Foxconn) ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose 60 places to reach No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc. at 348th, Pegatron Corp. at 461st, CPC Corp., Taiwan at 494th and Wistron Corp. at 496th. According to Fortune, the world’s
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
DIVERSIFYING: Taiwanese investors are reassessing their preference for US dollar assets and moving toward Europe amid a global shift away from the greenback Taiwanese investors are reassessing their long-held preference for US-dollar assets, shifting their bets to Europe in the latest move by global investors away from the greenback. Taiwanese funds holding European assets have seen an influx of investments recently, pushing their combined value to NT$13.7 billion (US$461 million) as of the end of last month, the highest since 2019, according to data compiled by Bloomberg. Over the first half of this year, Taiwanese investors have also poured NT$14.1 billion into Europe-focused funds based overseas, bringing total assets up to NT$134.8 billion, according to data from the Securities Investment Trust and Consulting Association (SITCA),
RSS