Carlyle to exit Taiwan's Ta Chong Bank to Yuanta Financial

According to a statement, Yuanta will acquire 2.58 billion shares of Ta Chong via a cash and stock deal valuing Ta Chong's shares at NT$16.3 apiece, representing a 31% premium to the stock's closing price of NT$12.45 on Tuesday. In addition to that, Yuanta is to purchase NT$14.5 billion in European convertible bonds (ECB) issued by Ta Chong, in which Carlyle is one of the main shareholders.

Yuanta Bank, the banking unit of Yuanta Financial, currently has NT$777 billion in total assets, Ta Chong has NT$450 billion. Upon completion of the deal, Yuanta Commercial Bank will have a combined of NT$1.23 trillion in total assets, with total loans and combined deposits of NT$745 billion and NT$993 billion, respectively.

"The acquisition of Ta Chong Bank gives Yuanta Bank a more extensive branch network to match securities branch allocation," it said in the statement. Yuanta, which focuses more on brokerage businesses, currently has 88 branches in Taiwan while Ta Chong operates 67 branches.

The deal, which is subject to approval from Taiwan's financial regulator, is expected to close in February next year.

The private equity firm purchased 35% of Ta Chong for NT$21.5 billion ($729 million) in 2007 via Carlyle Asia Partners II. It was reported that the private equity firm owned 17.2% of Ta Chong as of June.

In 2012, it was said that Carlyle and the Chen family intended to sell Ta Chong in a share swap with Yuanta that would value their equity at NT$15-17 per share, and give the private equity giant a 7% stake in Yuanta. However, the prospective buyer withdrew its NT$37 billion ($1.25 billion) bid for the asset amid reports that the parties failed to agree over the share swap ratio and the stock market decline at that time.

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• Topics
• Greater China
• Exits
• Financials
• China
• The Carlyle Group
• Exit
• Financial Services
• Taiwan (China)
• M&A
• Trade sale