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September 2022
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Taiwan’s first financial holding firm takeover gets official nod

Fubon
By Hui Ching-hoo   
September 22, 2022

Taiwan’s financial regulator has given the green light for the first takeover among the 16 listed financial holding companies on the island.

The Financial Supervisory Commission (FSC) approved Fubon Financial Holding’s acquisition of rival Jih Sun Financial Holding nearly two years after the deal, estimated at around NT$44 billion (US$1.4 billion), was first announced.

The cash takeover of the 26% of outstanding shares in Jih Sun Financial is expected to be completed by the end of the year, the FSC says in a statement on September 20.

Fubon Financial is the parent of Fubon Asset Management, the fourth largest of Taiwan’s 50 asset management firms.

Jih Sun Financial owns 20% of Jih Sun Securities Investment Trust Co, the 17th largest asset manager. A group of institutions including Jih Sun International Leasing, another unit of Jih Sun Financial, owns 80% of the securities firm.

Fubon Financial announced the acquisition plan in December 2020 but didn’t disclose the price at the time, and began buying up Jih Sun Financial shares in the open market.

In May this year, the company announced it would pay NT$11.71 apiece for Jih Sun Financial shares, and that it had already accumulated a 74% stake in its rival.

The deal will have very little impact on the operations of the two investment units as it only involves the transfer of Jih Sun Financial’s banking and securities units to Fubon Financial, according to Donna Chen, founder and president of Taipei-based investment consultancy firm Keystone Intelligence.

“Jih Sun SITE cannot be included in the deal as the financial regulator prohibits a single financial holding company from owning two asset management subsidiaries,” Chen tells Asia Asset Management.

But she says the deal may help broaden the distribution channels for Fubon Asset Management’s retail funds in the future.

Figures from the Securities Investment Trust and Consulting Association show that Fubon Asset Management manages 66 funds with NT$376.77 billion of assets under management, or 7.91% market share.

Jih Sun SITE manages 20 funds with NT$76.35 billion of assets, or 1.6% market share.