CTBC Financial’s Tender Offer for Shin Kong Financial Could Trigger a Financial-Sector Takeover Battle

Originally published 2024-09-16Robin’s commentary (as of September 2024)

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Collected in Robin Shen’s Field Notes · Content type and attribution are shown above

English translation of the Chinese post originally published 2024-09-16. Translated 2026-11-04 with AI assistance. Historical figures and claims have not been updated or independently verified. 中文原文

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Robin argues that approving CTBC Financial’s tender offer for Shin Kong Financial could set off a wave of takeover battles in Taiwan’s financial industry. Larger groups Fubon and Cathay have deeper capital resources and tighter family ownership. If they followed the same approach, privately owned financial holding companies could face annual battles over management control and share ownership, with implications for financial stability. His other suggestion is that major shareholders of financial holding companies should keep increasing their ownership stakes. With excessively dispersed ownership, a company could become the next target in a wave of consolidation.

Key points

A precedent for an unsolicited acquisition could trigger a chain reaction.
Fubon and Cathay have deeper capital resources and more concentrated controlling-family ownership.
Battles over management control and share ownership could affect financial stability.
Major shareholders should increase their stakes to avoid excessively dispersed ownership.

Columns and beams in an open building are connected by central rods and balanced weights, suggesting structure and checks in governance. — Capital markets & governanceThematic illustration · AI generated

Full text — English translation

Personally, I think there is an underlying consideration. If the Financial Supervisory Commission approves CTBC Financial’s tender offer for Shin Kong Financial, we should be prepared for the opening of a takeover battle in Taiwan’s financial industry. After all, a predator can become another predator’s prey. Behind them are two even larger financial holding companies: Fubon and Cathay. It is well known that both have deeper capital resources, and their respective families have even tighter ownership control. If we establish a precedent for an unsolicited acquisition, and CTBC and Shin Kong actually merge, the combined company may, in the short term, lack a dominant major shareholder with a sufficiently large stake. We could then expect Cathay and Fubon to follow suit and announce tender offers for shares in the combined CTBC–Shin Kong group. Ultimately, privately owned financial holding companies could face annual battles over management control, share ownership, and proxies, affecting the stability of Taiwan’s financial industry. My other suggestion is that major shareholders of financial holding companies should keep increasing their stakes in their own companies. If ownership is too dispersed, the company could become the next target in a wave of financial-industry consolidation.

These articles are personal notes, book excerpts, and collected reprints. Figures and events reflect the time of the original publication, are not current information, and do not constitute investment advice.

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