Shareholders of Taishin Financial Holding Co (台新金控) and Shin Kong Financial Holding Co (新光金控) yesterday approved plans for the companies to merge through a stock swap, which would result in the fourth-largest financial holding company in Taiwan.
In extraordinary shareholder meetings yesterday morning, 92.72 percent of Taishin shareholders in attendance approved the deal, while Shin Kong, where the merger faced some resistance, ultimately approved it with 72.29 percent of shareholders voting in favor.
“The development will usher in a new era for both Taishin Financial and Shin Kong Financial, which will grow into Taiwan’s fourth-largest financial conglomerate with assets of NT$8.3 trillion (US$258 billion) and a market value of NT$445 billion,” the two companies said in a joint statement.
Photo courtesy of Shin Kong Financial Holding Co
The new conglomerate would be named Tashin Shin Kong Financial Holding Co (台新新光金控) with Taishin Financial to be the surviving entity and Shin Kong Financial to be delisted, the statement said.
The merger is favorable for bilateral life insurance, banking and securities businesses, the statement said.
The two sides will arrive at a timetable for the integration after the Financial Supervisory Commission (FSC) and the Fair Trade Commission approve the merger, it added.
The boards of directors of Taishin Financial and Shin Kong Financial initially agreed to a merger plan on Aug. 22. However, that same day, CTBC Financial Holding Co (中信金控) launched its own bid to buy Shin Kong Financial viaa tender offer.
Faced with the competition, Taishin Financial submitted a new merger proposal on Sept. 11, raising the stock swap ratio to 0.672 of Taishin Financial common shares for each Shin Kong Financial common share, up from the previous ratio of 0.6022.
Taishin Financial also offered to exchange 0.175 preferred shares for one Shin Kong Financial preferred share to sweeten the deal.
CTBC Financial’s hostile takeover bid was rejected by the FSC on Sept. 16 on the grounds that it did not have a comprehensive plan to implement the acquisition. The FSC also openly denounced CTBC Financial's attempts harmful to the financial market’s order and stability. Days later, CTBC Financial announced that it was dropping its takeover bid.
Shin Kong Financial said the merger by share swaps would protect the interests of existing Shin Kong Financial shareholders, as they will automatically become the new conglomerate’s shareholders.
The two sides share similar corporate culture and value and would complement each other in a joint bid to expand its economic scale at home and abroad, Shin Kong Financial said.
Taishin Financial chairman Thomas Wu (吳東亮) is the younger brother of Shin Kong Financial former chairman Eugene Wu (吳東進). The Wu family also controls Shin Kong Mitsukoshi Department Store (新光三越百貨), Shinkong Synthetic Fibers Corp (新光人纖) and several other businesses in Taiwan.
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