Yuanta Financial Holdings to acquire Ta Chong Bank
Yuanta Financial Holdings (
) announced on Thursday that it will acquire Ta Chong Bank (
) at a price tag of NT$56.55 billion, which will make it the seventh-largest private bank in Taiwan.
Under the two banks’ agreement, Yuanta will acquire Ta Chong’s equity at the price of NT$8.15 per share.
Yuanta’s share price of NT$14.531, on the other hand, is computed by averaging out trad- ing prices 20 days, 40 days and 60 days before the acquisition agreement was signed.
Through the share swap, Ta Chong’s shareholders will receive NT$8.15 in cash as well as Yuanta shares for each Ta Chong share they own.
After the acquisition, Yuanta’s asset holding will reach NT$1.25 trillion, with nearly NT$1 trillion in savings, NT$75 million in loans, and 500,000 credit cards.
Yuanta currently has 88 branches on the island while Ta Chong owns 67. Most of Yuanta’s banks are located in Central Taiwan, while Ta Chong’s are centered in Northern and Southern Taiwan.
The two financial institutions’ businesses are likely to compliment each other. Yuanta’s provides loans mostly to institutions while Ta Chong’s customers consist mainly of private individuals.
The acquisition represents the first commercial bank merger in nine years. The Financial Supervisory Commission (FSC,
) said the boards of the two banks approved the deal and that it looks forward to a successful merger between the two.
The two banks have been in communication with the FSC for about a month. It just so happens that Ta Chong’s share prices began to rebound a month earlier.
To ensure labor rights and interests, Ta Chong’s human resource charters, labor agreement, and employee salary and benefits will remain unchanged three years after the two banks’ merger.
Financial analysts have said the merger is indicative that “size does matter” in the banking industry.
(Left) The Ta Chong Bank ( ) building is seen in this photo taken yesterday. (Right) The Yuanta Financial Holdings ( ) building is seen in this photo taken yesterday. Yuanta Financial Holdings announced on Thursday that it will acquire Ta Chong Bank.