The Fair Trade Commission (FTC) said yesterday that it has given approval for E.Sun Financial Holding Co (玉山金控) to acquire Mercuries Life Insurance Co (三商美邦人壽), after determining the deal posed no risk of restricting competition.
In a press release explaining its review of the acquisition, the commission noted that E.Sun Financial is primarily involved in the banking and securities sectors, while Mercuries Life operates in the life insurance industry.
Currently, E.Sun’s banking subsidiary operates an insurance agency business, which is a downstream sales channel in the insurance industry.
Photo: CNA
Following the merger, E.Sun Financial would operate in both insurance products and sales channels, helping it to diversify and increase vertical integration, the commission said.
Regarding the latter, the commission said its analysis had found that the combination of the companies’ upstream and downstream businesses -- Mercuries Life’s premium income and the commission made by E.Sun Commercial Bank Ltd (玉山銀行) for selling insurance products -- would not increase economic incentives for “vertical restraint,” meaning blocking competitors from crucial inputs or customer access.
This is largely due to the “fragmented” nature of Taiwan’s insurance market, which has numerous upstream and downstream businesses and diverse sales channels, it said.
E.Sun Financial’s acquisition of Mercuries Life via a share swap valued at NT$48.3 billion (US $1.52 billion) was announced on Jan. 23, after being approved by the two companies’ shareholders.
The deal is expected to close in the second half of this year.
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