Polaris MF Global Futures Co (寶來曼氏期貨) said yesterday its board had agreed to acquire Yuanta Futures Co (元大期貨) through a share swap, marking a second-phase integration of the nation’s two securities brokerage-centric financial groups.
On April 9, Yuanta Financial Holding Co (元大金控) announced that its brokerage unit, Yuanta Securities Co (元大證券), would merge with Polaris Securities Co (寶來證券) to create the nation’s largest brokerage firm.
In their separate stock exchange filings, the two companies said their boards had agreed to the merger of their futures units, which would allow Yuanta Futures shareholders to swap each of their shares for 1.01 shares in Polaris MF Global Futures, with the latter to be the surviving entity and renamed Yuanta Polaris Futures Co (元大寶來期貨).
As part of the merger with Yuanta Futures, the company will issue 101 million new shares, Polaris Futures said.
By merging their operations and creating a new entity, the deal would enhance their economies of scale and competitiveness, the filings said.
Shares of Polaris Futures ended at NT$37.30 yesterday in Taipei trading, up 0.95 percent from Monday. Shares of Yuanta Financial rose 0.55 percent to NT$18.40. Yuanta Futures is not listed on the local bourse.
Both companies said they would present the merger plans at their respective extraordinary shareholders’ meetings on Oct. 6 and that they expected to complete the deal by April 1. The deal is still subject to regulatory approval.
Polaris Futures chairman Ted Ho (賀鳴珩) said the merged entity would lead the sector in Taiwan in terms of market share and profitability.
“Following the merger, the new entity will retain its leading position in the domestic futures industry. At the same time, Yuanta Polaris Futures also seeks to move toward three areas: commodity trading advice, an overseas brokerage and market making,” Ho said in a statement.
Yuanta Futures currently leads the market with a share of 9.81 percent, while Polaris Futures has an 8.3 percent share.
Once the deal gains approval from shareholders and the Financial Supervisory Commission, the new entity would command a market share of 18.11 percent in Taiwan, with a network of 255 outlets.
The new company will also lead its local rivals in the domestic options market, with a market share of 9.19 percent, as well as in the overseas futures market, with a share of 25.26 percent, the two companies’ data showed.
As of the end of June, the new entity would have combined assets of NT$41.27 billion (US$1.43 billion), a net worth of NT$5.69 billion, capitalization of NT$2.32 billion and a net profit of NT$424 million, data showed.
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