Taiwan's Financial Landscape Transforms: Taishin and Shin Kong Merger Approved!

A Landmark Deal Reshapes the Banking Sector, Creating a Financial Powerhouse.

Taipei, March 31 – In a significant development for Taiwan's financial sector, the merger of Taishin Financial Holding Co. and Shin Kong Financial Holding Co. has received final regulatory approval. This momentous decision, finalized on Monday, marks the culmination of discussions that have spanned over two decades, signaling a new era for the nation's financial landscape.

The merger will forge a financial holding company with staggering assets, estimated at NT$8.43 trillion (US$253.78 billion). This new entity will rank fourth among Taiwan's 15 financial holding companies based on figures from the end of 2024, underscoring its substantial influence and market presence.

The Financial Supervisory Commission (FSC) confirmed its approval in a statement released on Monday, indicating that Taishin Financial will be the surviving entity, while Shin Kong Financial will be absorbed. This pivotal decision paves the way for the two companies to finalize a merger date, with Shin Kong Financial shares set to be delisted from the Taiwan Stock Exchange Corp. 30 business days prior to the official merger date.

The newly formed company, set to be called TS Financial Holding Co., Ltd., will be established through a stock swap, approved by the shareholders of both entities on October 9, 2024. The agreement stipulates that 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.

On Monday, before the FSC's approval, Taishin Financial's stock closed at NT$17.20 per share, while Shin Kong Financial shares closed at NT$12.20 per share, reflecting the market's anticipation of the merger's outcome.

The merger discussions between the two companies initially began in 2002, but they were stalled due to disagreements concerning the statutory reserves of Shin Kong's life insurance unit. Renewed talks were initiated on multiple occasions, but they gained serious traction after Shin Kong Financial elected a new board in June 2023, which had members who were more inclined to a merger.

The companies' boards agreed on a merger plan on August 22, 2024. However, on the same day, CTBC Financial Holding Co. launched a bid to acquire Shin Kong via a tender offer. Taishin responded with a revised offer on September 11, 2024, to counter CTBC's attempted hostile takeover. The FSC ultimately rejected CTBC's bid on September 16, citing a lack of a comprehensive acquisition implementation plan. CTBC subsequently withdrew its takeover bid.

This landmark merger mirrors a broader trend of consolidation within Taiwan's financial sector, aimed at creating larger and more robust players. Notably, Fubon Financial Holding Co., Ltd. and Jih Sun Financial Holding Co., Ltd. completed the first merger between financial holding companies in November 2022.