Taipei, Oct. 19, 2012 (CENS)--Fubon Financial Holding will close a deal for the acquisition of First Sino Bank, a Taiwanese-invested bank in Shanghai, by the end of this month, at the earliest. According to insider sources, Fubon will buy out 100% stake in First Sino Bank at 5.8-6.4 billion yuan (NT$25-28 billion), while the three major shareholders of First Sino Bank will also obtain 5% stake in Fubon.
The acquisition of First Sino Bank will give Fubon Financial Holding a major boost in its effort to tap the mainland Chinese market. First Sino Bank focuses on corporate banking and counts large numbers of Taiwanese businesses as its customers. Its specialty can supplement Fubon's expertise in consumer banking, facilitating the development of wealth-management business and enabling Fubon to secure a major lead over its Taiwanese peers in mainland Chinese business.
Insiders said that Tsai Chi-jui, president of Pou Chen Group which is a major shareholder of First Sino Bank, has reached an agreement with Fubon over the pricing of deal and both parties are now discussing the personnel problem. The deal may be concluded by the end of this month or early next month.
Fubon is expected to make the acquisition via share swap and some cash payment, similar to its acquisition of Taipei Bank and ING Antai Life Insurance. Insiders said that the three major shareholders of First Sino Bank will obtain 5% stake in Fubon, worth NT$15 billion, and cash payment of NT$10-13 billion.
Fund for cash payment may be raised via bond issuance or cash capital increment. In the former case, Pou Chen may subscribe to the bond issuance fully.
First Sino Bank now has three branches and 11 offices, mainly located in Shanghai, Shenzhen, and Tianjin. The takeover of First Sino Bank will greatly expand the business scope of Fubon in mainland China; Fubon now owns Xiamen Bank, a business office in Suzhou, and an office in Dongguan.
First Sino Bank is a quality foreign bank in mainland China. According to its 2011 annual report, it boasted 1.1 billion yuan of capital, 40.5 billion yuan (NT$182.5 billion) of total assets, and 312 million yuan of after-tax net profit.
(by Philip Liu)