Taishin Financial Holding Co (台新金控) yesterday confirmed plans that its brokerage unit would wholly acquire Ta Chong Securities Co Ltd (大眾證券) in a deal worth NT$4.23 billion (US$136.29 million) after denying media reports earlier this week.
The two companies have secured approval from their respective boards of directors, with the price of the acquisition set at NT$11.2 per share, company officials said at a news conference at the Taiwan Stock Exchange, adding that a formal contract would be inked on Monday.
Taishin Securities Co (台新證券), the brokerage arm of the bank-focused financial conglomerate, would be the surviving entity following the merger, which is expected to be completed by the end of July pending regulatory and shareholders’ approval, it said.
Taishin Financial has gained the consent of Yuanta Financial Holding Co (元大金控) to push forward with the acquisition, Taishin Financial chief financial officer Welch Lin (林維俊) said.
Yuanta Financial owns about a 35 percent stake in Ta Chong Securities through its acquisition of Ta Chong Bank Ltd (大眾銀行) last year.
Lin said the deal would be conducted by Taishin Securities, while its parent company would provide NT$3.73 billion in cash in exchange for 322.5 million shares in the brokerage unit.
Taishin Securities has promised to retain all of Ta Chong’s employees, and preserve their wages and benefit terms for the next two years, Lin said.
Taishin Securities’ market share in Taiwan is expected to climb from 0.0002 percent to more than 0.005 percent following the deal, a better position to compete with other mid-sized brokerage rivals in the challenging market, Lin said.
Taishin Securities has 310 employees and three branches in Taiwan, compared to Ta Chong’s headcount of 417 with 15 branches.
“Ta Chong’s experienced brokers would complement Taishin Securities’ expertise in underwriting initial public offerings,” Lin said.
The acquisition would also expand Taishin Securities’ footprint in the south by eight branches, he said.
Ta Chong posted earnings of NT$11.29 million in the first two months of this year, up from losses of NT$5.72 million in the same period the previous year.
Taishin Financial, which only provided an earnings breakdown for its banking unit, reported earnings of NT$2.1 billion in the first two months, down 21.93 percent from the previous year.
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