The Financial Supervisory Commission late on Tuesday announced plans to effectively block hostile takeovers in the nation’s crowded financial sector, months after preventing a roughly US$4.1 billion deal that would have created Taiwan’s largest financial group.
The commission would amend rules to close the door to nonconsensual mergers and acquisitions to ensure market stability, it said in a statement.
In the future, acquiring financial firms must get a board resolution from the target company indicating no objection, or show that they can secure a majority of shares or board seats to complete the acquisition, the commission said.
Photo: Kelson Wang, Taipei Times
The changes aim to establish an environment for mergers and acquisitions in the financial sector while maintaining market stability, it said, adding that the proposed amendment would be open to public feedback for 60 days.
Last year, the commission rejected CTBC Financial Holding Co’s (中信金控) takeover bid for smaller rival Shin Kong Financial Holding Co (新光金控), citing reasons including potential disputes over management rights.
While Shin Kong Financial then pursued a separate, agreed merger, many analysts have said that Taiwan has too many financial groups for a country of about 23 million people.
The proposed amendments would also demand that public takeovers be paid in cash, to avoid volatility in share prices.
The commission also wants to increase the minimum initial investment by those seeking to take over a financial company, to 25 percent from 10 percent.
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