Taiwan Life Insurance Co (台灣人壽保險) shareholders yesterday voted to scrap a planned merger with CTBC Financial Holding Co (中信金控).
CTBC Financial said in a stock exchange filing that it respects the life insurer’s decision, which should come as little surprise after moves by Long Bon International Co (龍邦), Taiwan Life’s biggest shareholder, over the past three months to block the deal valued at about NT$26.6 billion (US$884.87 million) via a share-swap scheme.
The 67-year-old insurer’s shareholders overturned a board decision in April to extend the deadline to decide on a merger from April 30 to June 30 and put an end to all consolidation moves.
Photo courtesy of Taiwan Life Insurance Co
After winning majority control of the insurer’s 10-seat board in the morning, Long Bon, a Greater Taichung-based developer and hotelier, initiated two unscheduled motions to quash the deal that would allow each Taiwan Life share to be exchanged for 1.44 shares of CTBC Financial.
The reversal sailed through the annual shareholders’ meeting despite protests by state-owned Bank of Taiwan (台灣銀行), which issued a lengthy statement early in the morning to support the merger and questioned Taiwan Life’s stance on the merger.
Taiwan Life initiated the merger last year, saying the business environment has grown increasingly difficult for insurers without the support of banks and other financial affiliates to boost cross-selling efficiency, the Bank of Taiwan said in a statement.
Taiwan Life first struck a merger agreement with CTBC Financial in October last year and the two sides called separate shareholders’ meetings to approve the deal in December.
“Taiwan Life has yet to give a reasonable account today for the turnabout that is hurting the company’s creditability, image and share price,” the statement said.
Taiwan Life shares closed down 3.46 percent at NT$20.90 yesterday, underperforming the TAIEX, which edged up 0.07 percent, Taiwan Stock Exchange data showed.
The stock has slumped 21.43 percent over the past three months, compared with a 3.5 percent gain for financial and insurance plays and a 5.93 percent rally for the benchmark index.
Taiwan Life has since mid-April made known its intention to back off from the merger, saying the Financial Supervisory Commission’s punishment of CTBC over an investment violation merited reconsideration.
However, the one-year investment ban does not extend to existing acquisition cases.
Taiwan Life is reportedly unhappy about the “rough treatment” exhibited by CTBC Financial during consolidation talks.
Local media said a suitor from Macau later entered the scene, with a much more generous offer if the insurer remains available.
Taiwan Life yesterday said it aims to strengthen organic growth and narrow negative interest spreads from legacy policies.
The insurer elected former Chinese Nationalist Party (KMT) legislator Hsu Shu-po (許舒博) to replace Chu Ping-yu (朱炳昱) as chairman.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to