CTBC Financial calls off China deal

CTBC Financial Holding Co. (???) has scrapped a plan to fully acquire China CITIC Bank International Ltd. (????), citing a lack of progress since the deal was announced in May 2015.

CTBC Financial said that plan has been aborted because neither side has yet applied to the relevant authorities for approval of the deal, which means it is unlikely to be completed by the end of the year as scheduled.

Neither side wants its business to be hampered by the lack of progress on the acquisition plan, CTBC Financial said.

In addition, an agreement for China CITIC Bank Corp. to buy a stake in CTBC Financial as part of the acquisition deal has also been scrapped.

China CITIC Bank International is a subsidiary of China CITIC Bank Corp Ltd. (????), a financial giant on the Chinese mainland.

Last year, CTBC Financial announced that its wholly owned banking subsidiary CTBC Bank will spend NT$11.67 billion (US$368 million) to acquire a 100 percent stake in China CITIC Bank International.

In turn, CTBC Financial said, it had agreed to make a private placement of NT$12 billion to give China CITIC Bank Corp. a 3.8 percent stake in its business.

If the deal had gone through, it would have been the first acquisition by Chinese financial institution of a stake in a Taiwanese financial company.

Right after the deal was announced last year, shares of CTBC Financial soared on investor hopes that the Taiwanese firm would benefit from the inclusion of a Chinese shareholder.

Although the deal has been aborted, CTBC Financial said, CTBC Bank will continue to strengthen its operations in the China market.

Currently, CTBC Bank has three branches in China — in Shanghai, Xiamen and Guangzhou.

It was the second cancellation in a month of CTBC Financial’s efforts to acquire stakes in overseas enterprises.

On Aug. 8, CTBC Financial announced that it had decided not to pursue a deal to purchase the assets of Royal Bank of Scotland Group Plc (RBS) in Malaysia also due to a delay in the acquisition process.

In April, CTBC Financial said that it had agreed to purchase a 100 percent stake in the Royal Bank of Scotland Berhad, a subsidiary of RBS, for about NT$6.1 billion, marking the first attempt by a Taiwanese financial institution to operate a banking subsidiary in Malaysia.

CTBC Financial said that because of a lack of progress, the deal could not be completed in November as scheduled.

Source: Focus Taiwan