A Study on Mergers and Acquisitions of Taiwanese Banks by Private Equity Funds : The Cases of Cosmos Bank, EnTie Bank & TaChong Bank

• Main Authors: Yann Huei Chen, 陳彥翬
• Other Authors: S. J. Lin
• Format: Others
• Online Access: http://ndltd.ncl.edu.tw/handle/60247776791439533446

碩士 === 長庚大學 === 企業管理研究所在職專班 === 98 === Private equity funds often leverage on high portion of debt financing when they acquire companies. With only 25-30% of deal amount being financed by their own equity, these funds pledge the acquired assets to finance the rest of the deal amount. This study investigates the post-acquisition management and potential opportunities and risks from the leveraged buyouts of Taiwanese financial institutions by private equity funds, in particular the cases of Cosmos Bank, EnTie Bank, and TaChong Bank. This study analyzes the post-acquisition development and strategies adopted, and then evaluates the opportunities and future development of these three banks. This study adopts a qualitative research method, relying on different sources to collect related information of the three focused banks. It also discovers implications of different events by interpreting the interconnection of different information, and looks for new findings during the research process. The conclusions from this study are as below: 1.The lucrative financial return for private equity funds during the past decade has led them overlook the timing for acquisitions. Serious erosion to bank earnings by financial crisis is likely to impact deal performance and exiting time frame of private equity funds. 2.It is debatable whether the costs/benefits of hiring from competitors are up to original expectations of private equity funds. 3.Private equity funds need to lay off underperforming staff in a smooth manner and communicate to valuable employees to maintain the morale of remaining employees. 4. Besides financial manipulations, Private equity funds need to focus more on bank's business development in order to precisely elevate the bank's value.