Corporate Mergers Top NT$150 Billion in Three Years

      Taiwan’s effort to promote corporate mergers and acquisitions has achieved substantial results, with 288 M&As with a total value of NT$151.89 billion being carried out since the Business Mergers and Acquisitions Act was promulgated in February 2002. The Ministry of Economic Affairs reports that it is now formulating more liberal M&A methods to encourage foreign multinational enterprises to engage in M&As in Taiwan, and that, in the future, M&As will merely have to be reported after the fact instead of being approved beforehand.

　　According to statistics compiled by the Commerce Department of the Ministry of Economic Affairs (MOEA), M&As totaled 50 cases worth NT$66.45 billion in 2002, 20 cases worth NT$12.91 billion in 2003, and 218 cases worth NT$72.53 billion in 2004 (see Table 1 & Table 2 for details).

　　Viewing from the scale of M&A cases, small and medium enterprises (those capitalized at no more than NT$500 million) accounted for 54% of all of these M&As, while enterprises capitalized at NT$2 billion and more accounted for 23%. Categorized by industry, electronics industry accounted for the largest portion, at 22.9%, followed by construction with 11.8% and finance with 8%.

　　The MOEA indicates that the further liberalization of M&A methods will be considered with the aim of facilitating more M&As. Changes currently under formulation tend toward revision of the Statute for Investment by Foreign Nationals and the Company Act. In the future, multinational corporations (MNCs) engaging in M&As in Taiwan (with the exception of those from mainland China and those investing in items on the negative list) will be required to report their M&As only after the fact. Liberalization or abolishment of the operating revenue threshold for MNCs is also being considered.

Table 1  Mergers and Acquisitions in Taiwan　(Unit: NT$ billion)

　

Type of M&A Year		Mergers	Acquisitions	Share Transfers	Share Splits	Total
2002	No. Cases	36	5	9	0	50
	Value	25.44	1.87	39.14	0	66.45
2003	No. Cases	12	7	1	0	20
	Value	3.8	3.56	5.55	0	12.91
2004	No. Cases	162	12	11	33	218
	Value	33.0	2.73	17.6	19.2	72.53
Total	No. Cases	210	24	21	33	288
	Value	62.24	8.16	62.29	19.2	151.89

Source: Commerce Department, Ministry of Economic Affairs

Table 2  Mergers and Acquisitions by MNCs　(Unit: US$ million)

　

Type of M&A	Mergers	New Share Split	Absorption of Shares	Share Exchange	Share Transfer	Total
No. Cases	2	3	4	2	4	15
Value	20.922	61.527	62.930	10.728	61.875	217.983

Source: Commerce Department, Ministry of Economic Affairs

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