CTBC Financial Holding Co (中信金控), the nation’s third-largest financial service provider by assets, yesterday said it would acquire Taiwan Life Insurance Co (台灣人壽) and its banking subsidiary would buy Japan’s Tokyo Star Bank, as part of its expansion plans at home and abroad.
The bank-focused group plans to buy a 100-percent stake in Taiwan Life through a share swap scheme worth nearly NT$26 billion (US$882.55 million) by trading each Taiwan Life share for 1.44 shares in CTBC Financial, the two companies said.
The deal, which still needs regulatory approval, prices Taiwan Life at a 9.79 percent premium based on its closing price of NT$26.1 yesterday. CTBC Financial closed at NT$19.90, Taiwan Stock Exchange data showed.
CTBC Financial, which also owns CTBC Life Insurance Co (中信人壽), said it would keep both insurance brands and retain all of Taiwan Life’s 6,000 employees, with their compensation and benefits unchanged for two years.
The buyout would not affect the rights of Taiwan Life’s customers and their more than 1.5 million insurance policies, the two companies said.
The 66-year-old Taiwan Life has total assets of NT$430 billion, and the acquisition would make CTBC’s life insurance operation the eighth largest among domestic insurers, the companies said.
Both companies plan to convene shareholders’ meetings on Dec. 20 to approve the merger.
CTBC Bank (中信銀行), the nation’s largest credit card issuer, also announced that its board had approved plans to buy a 98.16 percent stake in Japan’s Tokyo Star Bank for ￥52 billion (US$520 million), the first takeover of a Japanese commercial lender by a foreign bank.
CTBC Bank, formerly known as Chinatrust Commercial Bank, will buy the shares from the Tokyo bank’s shareholders, including Shining Sart Godo Kaisha and Allied Holdings Godo Kaisha.
The acquisition is subject to approval from financial regulators in Japan and Taiwan, it said.
The Taiwanese bank has sought to deepen its presence in Japan and has inked cooperation pacts with six Japanese regional banks this year.