The most recent merger in Taiwan was between Fubon Financial Holding Co. and Jih Sun Financial Holdings in 2022-2023. The two’s bank subsidiaries held a combined market share of 5.7% in deposits before the transaction, notes Fitch Ratings. Given the small scale of the deal, “it will have no material impact on the sector’s highly fragmented nature,” Fitch said.However, there is now a much larger deal that is likely to happen: a US$17 billion merger between Shin Kong Commercial Bank and Taishin Holdings. If successful, it will be the largest ever financial sector M&A deal in Taiwan’s history. Taishin plans to acquire 100% of Shin Kong through a share swap under a deal agreed by the two groups in August. Shin Kong and Taishin are controlled by different brothers from the Wu family, one of Taiwan’s wealthiest families.
Taiwan’s CTBC Financial had also sought to acquire Shin Kong in a hostile takeover, but withdrew its bid in the face of opposition from the Financial Supervisory Commission (FSC). The FSC said that the tender offer included stock as part of its payment for Shin Kong Financial shares, which the commission was concerned would not adequately protect the shareholders of the two companies. FSC Vice Chairperson Jean Chiu said that the commission's rejection was "adamant."
However, some analysts believe the regulator simply did not want to see a hostile takeover happen.
The merger of Shin Kong and Taishin is likely to be beneficial for the overseas aspirations of Taiwan’s banking sector. While many Taiwanese banks have a presence in both China and Southeast Asia, they typically lack the scale to compete internationally with the likes of large U.S., European or Japanese lenders.