The Financial Supervisory Commission yesterday approved plans by CTBC Financial Holding Co (中信金控) to buy Taiwan Life Insurance Co (台灣人壽), allowing the two sides to facilitate the deal before the deadline on June 30.
The regulator, whose earlier investment ban on CTBC pushed the deal to the brink of collapse last week, gave the go-ahead yesterday, saying the buyer met both professional and financial requirements.
The bank-focused conglomerate is buying 100 percent of the 67-year-old insurer though a share swap deal, with each share of Taiwan Life trading for 1.44 shares of CTBC Financial.
The offer suggests a 7.23 percent premium to Taiwan Life’s closing price of NT$25.65 yesterday, when it closed up by its daily limit for the second straight session, Taiwan Stock Exchange data showed.
By contrast, CTBC Financial fell 1.29 percent to NT$19.1, as the acquisition drama pans out.
CTBC Financial has offered to retain all Taiwan Life employees with their compensation unchanged for two years. The commission said the buyout would not affect the rights of Taiwan Life’s customers and their more than 1.5 million insurance policies.
Taiwan Life had NT$449.7 billion (US$14.86 billion) in assets as of December last year, and the acquisition would make CTBC’s life insurance operation the eighth largest in Taiwan, the companies said.
With its reliance on traditional sales agents, Taiwan Life’s profitability has been hit in recent years as market competition intensifies, Chung-Hua Institution for Economic Research (中華經濟研究院) president Wu Chung-shu (吳中書) said.
CTBC Bank (中信銀行) and CTBC Life Insurance Co (中信人壽) could provide a boost with their strong bancassurance and telemarketing force, Wu said.