Taishin-Shin Kong merger gets final regulatory go ahead

Taipei, March 31 (CNA) The merger of Taishin Financial Holding Co. and Shin Kong Financial Holding Co. cleared its final hurdle Monday when Taiwan's top financial regulator approved the move that has been discussed on and off since 2002.

The deal will result in a financial holding company with assets of NT$8.43 trillion (US$253.78 billion), which would rank fourth among Taiwan's 15 financial holding companies based on figures at the end of 2024.

In a statement Monday, the Financial Supervisory Commission (FSC) said it had agreed to the merger, and that Taishin Financial will be the surviving entity while Shin Kong Financial will cease to exist.

With the approval, the two companies will now set a merger date, and 30 business days prior to that date shall apply to the Taiwan Stock Exchange Corp. to delist Shin Kong Financial shares from the market, the FSC said.

The new company, to be called TS Financial Holding Co., Ltd., will be created through a stock swap approved by the shareholders of the two companies on Oct. 9, 2024.

Under the agreement, Taishin Financial will exchange 0.672 of its common shares for one Shin Kong Financial common share and 0.175 preferred shares for one Shin Kong Financial preferred share.

Taishin Financial's stock closed at NT$17.20 per share Monday before the FSC approval was announced, while Shin Kong Financial shares closed at NT$12.20 per share.

The two companies originally discussed a merger as far back as 2002, but it fell apart over a disagreement on the statutory reserves to be carried by Shin Kong's life insurance unit.

Talks had been rekindled numerous times since then, but they were not revisited in earnest until after Shin Kong Financial elected a new board in June 2023 dominated by members more favorably disposed to a merger.

The companies' boards eventually agreed on a merger plan on Aug. 22, 2024, but on the same day, CTBC Financial Holding Co. launched its own bid to buy Shin Kong via a tender offer.

Taishin sweetened its offer on Sept. 11, 2024, to fend off CTBC's attempt at a hostile takeover, which was rejected by the FSC on Sept. 16 on the grounds that it did not have a comprehensive plan to implement the acquisition.

Days later, CTBC announced that it was dropping its takeover bid.

There has been a trend toward consolidation in Taiwan's financial sector in recent years to create bigger players.

Most notably, Fubon Financial Holding Co., Ltd. and Jih Sun Financial Holding Co., Ltd. consummated the first merger between financial holding companies in November 2022.