Yuanta Financial Holding has agreed to purchase Taiwanese lender Ta Chong Bank in a cash-stock deal worth nearly NT$56.55bn ($1.7bn).
Under the terms of the transaction, Yuanta Financial’s fully owned unit Yuanta Commercial Bank will acquire a 100% stake in Ta Chong in cash and through a share swap at NT$16.3 per share.
At the same time, Yuanta Bank will buy $350m worth of Ta Chong’s overseas convertible bonds, which are owned by private-equity firm Carlyle.
The new entity, formed after the acquisition, will have NT$1.25trn in assets and NT$1trn in deposits, and will operate with 155 banking branches in Taiwan.
Yuanta Financial has also vowed to protect the employees of Ta Chong for 36 months after the closing of the deal, which has already received the nod from the boards of the two companies.
The transaction, currently subject to regulatory approval, is scheduled to close by next February.