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CITIC Financial Holdings announced a remarkable move on August 23rd to acquire a controlling stake in Shin Kong Financial Holdings. The board of directors approved the public acquisition of Shin Kong’s shares, offering NT $14.55 per share, a price deemed reasonable by financial consultants. CITIC Financial has increased its acquisition ratio, raising the upper limit from 25% to 51%, aiming to secure a majority stake in Shin Kong Financial Holdings.
General Manager Gao Lixue elaborated on the acquisition details, explaining that the offer includes approximately 0.3132 shares of CITIC Financial Holdings common stock and NT $4.09 in cash per share of Shin Kong Financial Holdings. Based on CITIC’s recent stock price of NT $33.4, this translates to an acquisition price of around NT $14.55 per share. CITIC Financial intends to acquire between 10% and 51% of Shin Kong’s equity.
Gao Lixue emphasized that after securing investment approval from the relevant authorities, the conditions will be submitted to the board of directors for final approval. The acquisition price has been carefully evaluated by professional institutions, taking into account the potential synergies post-merger. CITIC Financial aims to become the largest financial holding company, the largest bank, and the third-largest life insurance company in Taiwan.
CITIC Financial Holdings has a track record of successful mergers, as evidenced by its acquisition of Taiwan Life. Since that merger, Taiwan Life’s net worth has increased 5.8 times, from NT $24 billion to NT $164.5 billion, and its profitability has soared, turning a NT $1.8 billion loss before the merger into NT $117.3 billion in profits in the first half of this year. This demonstrates CITIC Financial’s ability to generate significant synergies, justifying the higher acquisition price for Shin Kong Financial Holdings.
CITIC Financial Holdings currently boasts total assets of NT $8.38 trillion and a market value of NT $649.4 billion, surpassing Shin Kong Financial Holdings’ total assets of NT $5.08 trillion and a market value of NT $213.6 billion. The merger will consolidate the financial industry, stabilizing finances by combining the larger CITIC Financial with the smaller Shin Kong Financial Holdings.