| Summary: | 碩士 === 國立臺北大學 === 國際財務金融碩士在職專班 === 95 === In recent years, more and more international financial institutions have merged with other international or local financial institutions. The mergers between financial institutions that exceeded US$10 billion are not uncommon. According to the report on the outlook of banking industry in 2005 released by Deloitte Touche Tohmatsu (“DTT”), “merger: to achieve strategic balance” was listed as number one of the ten trends in 2005. DTT thought that large banks utilized mergers to broaden their product lines and penetrate into new markets in order to become larger and more competitive.
Foreign investors have been entering into Taiwanese financial markets aggressively from a few years ago. They purchased many stocks of E.SUN Financial Holding Company, Taishin Financial Holding Company, Jih Sun Financial Holding Company, Cosmos Bank, etc., but most of them didn’t intend to replace existing management teams with their own. On September 29, 2006, Standard Chartered Bank announced that it had launched a general tender offer for the entire issued shares of Hsinchu International Bank. This was the first case that a foreign bank acquired a local bank in Taiwan.
Equity investors, corporate managers, creditors and scholars continuously feel interested in how to assess the value of acquired companies. This research based by case studies is aimed at estimating the value of Hsinchu International Bank by the dividend discount model. In consideration of many factors and assumptions and in comparison with other similar mergers, the price of NT$24.5 per share offered by Standard Chartered Bank is considered too high in the financial perspective. As a matter of fact, in addition to financial effects, non-financial effects are also a main concern when considering a merger. The above-mentioned acquisition can save Standard Chartered Bank much time and cost on establishing channels and markets and give Standard Chartered Bank many good corporate clients in Hsinchu Science Park and many business opportunities in the Greater China Region.
The said merger will also induce other foreign banks to follow. Lack of branches has been a major obstacle for foreign banks to develop consumer banking and corporate banking business in Taiwan for a long time. To develop wealth management business and gain benefit from the economic growth of Taiwan, more and more foreign banks will try to get more branches through acquiring local banks. Foreign banks will make use of acquired banks’ employees that are familiar with local language and culture to expand business, including the business related to China. As a result, local banks must change their business models, create new niches and have good integration to be competitive, increase their size and create more profit for their shareholders.
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