| Summary: | 碩士 === 國立中山大學 === 財務管理學系研究所 === 96 === The International Monetary Fund points out that four kinds of financial crisis in the world financial markets currency crisis, external debt crisis, bank crisis and systematic crisis . Taiwan could be happened in bank crisis and could have potentially impaired the economies of Taiwan. That was reason why Government protected banking industry avoiding collapse and bankruptcy.
This paper details why Private Equity Fund M&A Taiwan domestic bank and the effects on financial markets. Since 2006 Carlyle Group one of a global private equity investment firm takeover bid for Advanced Semiconductor Engineering Inc (日月光半導體)--the world''s top chip packager for US$5.45 billion- Private Equity Firm had known for Taiwan financial markets. The Government refused the plan due to that takeover bid may weakening the local capital market and leading to an outflow of investment into China.
Foreign investment in Taiwan''s banking industry is not new, but the acquisition of domestic banks has only become available to Private Equity Fund recently. The domestic banking industry has become a lucrative target for foreign investors not only of the Government has a policy of limiting the quantity of banking branches but also lower P/B in Asia region. Since 1997s, a striking feature in the development of Taiwan banking industry structure is the significant decline in the performance of banks while the steadily increase in the number of bank branches and caused by overbanking in Taiwan.
As Taiwan slowly opens its banking industry after second round banking reformation in 2001, global M&A trends also had impacts on Taiwan, foreign financial institutions are increasingly looking to make strategic and financial investments. This paper gives a brief description of the development in the past 10 years, analyzes the driving forces on the merger of financial institutions
From this research, we could come to the conclusions as follows:
1. A financial investment in domestic banks is a win-win for the various parties Private equity fund M&A of domestic commercial banks not only a very good source of capital in Taiwan, but also, through the competition of foreign banks, stimulates domestic financial institutions to upgrade operational skills and management, and improve operational efficiency and competitiveness, thus contributing to the upgrading of the financial system.
2. This paper using threshold regression model to find an adequate branch numbers of Commercial Banks industry in Taiwan. We found significant evidence good for the shareholders equity only when the branch numbers are larger than 88.
3. On the view of bank branch, the next target acquired company is Far Eastern International Bank(35 branches) ,Jih Sun Bank(36 branches) , King‘s Town Bank(62 branches) ,Taichung Commercial Bank(78 branches).ABN AMRO Bank(Taiwan)M&A Taitung Business Bank, the branches from 5 to 37, not to meet the bank''s need for scale economics in Taiwan markets and should be M&A again
4. Private Equity Fund aims to pursue long term total return primarily through investment in equities and equity-related securities but had unique niche in resolving banking risk and corporate governance. also capitalized on the recovery of financial markets after the financial crisis in Taiwan banking indusdry According to experience of Private-Equity Firm to merge to banking industry in Korea Private Equity Fund exit their investments at last within 5-7 years after turned the bank successfully around
5. It''s difference type of entering the Taiwan market through the acquisitions of banks, one is strategic investment (e.g.,Citigroup and Standard Chartered) and financial players (e.g., Newbridge Capital, The Carlyle Group).Strategic investment made a goal to construct a plateform to link Taiwan and China
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