CTBC Financial Holding Co (中信金控) yesterday said it is acquiring Taiwan Life Insurance Co (台灣人壽保險) at a premium of nearly 10 percent, which may help boost its life insurance unit to the sixth-largest in the nation.
“CTBC is to issue new shares to acquire a 100 percent stake in Taiwan Life, with the issuance amount to account for about 8.4 percent of the company’s original paid-in capital,” CTBC senior vice president Rachael Kao (高麗雪) told a news conference.
The two firms have agreed to a deal that would allow each Taiwan Life common share to be exchanged for 1.44 CTBC common shares, and one Taiwan Life preferred stock for each CTBC preferred stock.
Photo: CNA
With CTBC shares closing at NT$23.2 yesterday, the transaction may cost the company NT$32.35 billion (US$1.05 billion), offering a premium of 9.9 percent, the company said in a statement.
The two companies still have to win approval of the deal from their shareholders at an annual meeting on June 29 as well as from the Financial Supervisory Commission.
They said they expect to close the deal in October and hope to complete the integration at the end of this year.
CTBC would see total assets of its life insurance business, CTBC Life Insurance Co Ltd (中國信託人壽), reach nearly NT$900 billion after the acquisition, making it the sixth-largest in the nation. The market share of its first-year premiums would also increase to 10.1 percent, the fourth-largest in Taiwan.
This is the second time CTBC has offered to acquire Taiwan Life. Its offer last year was rejected by Taiwan Life shareholders, including the biggest shareholder, Long Bon International Co (龍邦國際).
CTBC said the price of the latest deal is reasonable, as Taiwan Life has seen its total assets increase to NT$508.3 billion, but it did not say if Taiwan Life’s major shareholders would acquire a seat in the financial holding firm’s board of directors.
Taiwan Life policyholders’ rights and interests will be well protected, and the life insurer’s employees will be retained with the same salary for at least two years, the two companies said.
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