Taishin Financial Holding Co (台新金控) has filed an application with the Fair Trade Commission (FTC) for approval to merge with Shin Kong Financial Holding Co (新光金控), while CTBC Financial Holding Co (中信金控) filed a different application with the commission for a tender offer to acquire Shin Kong Financial, the commission said yesterday.
The commission said it would check each of the two applications for up to 90 days after the review process begins.
Taishin Financial and CTBC Financial are both aiming to take Shin Kong Financial completely under their corporate umbrella.
Photo: Taipei Times file photo
FTC Vice Chairman Andy Chen (陳志民) said both cases are a horizontal combination, so the commission will consider several major aspects, including market concentration, possible collusion in pricing, and the potential of synergies to provide better services to clients.
A horizontal combination is the merger or acquisition of companies in the same industry at the same stage of production or distribution.
Chen said the Taishin-Shin Kong deal or the CTBC-Shin Kong combination would create a large-sized entity, adding that Taishin Financial and CTBC Financial will likely need to provide more information on their plans and that the paperwork could take several months to complete.
Based on Chen’s assessment, it is unlikely that the Taishin-Shin Kong case review will be completed before two special general meetings of the companies scheduled for Oct. 9 when they will secure approval from their shareholders.
While Taishin Financial criticized CTBC Financial for attempting a hostile takeover without approval from Shin Kong Financial’s director board, CTBC Financial dismissed the argument, saying it has aimed to appeal to Shing Kong Financial’s shareholders through the tender offer to secure broader approval.
Chen said the FTC is to focus on whether market competition will be hampered by a merger or an acquisition, adding that the commission will review the two applications separately.
According to CTBC Financial, acquiring Shin Kong Financial would boost its assets to NT$13.5 trillion, up from roughly NT$8.37 trillion. It would also become the largest financial holding firm in Taiwan.
On the other hand, merging with Shin Kong Financial would raise Taishin Financial’s assets to almost NT$8.29 trillion. It would become the fourth-largest financial holding firm in Taiwan.
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