SHARE SWAP: First Securities Investment Trust Co would be the surviving entity due to its larger asset base and stronger operating performance, executives said
By Crystal Hsu / Staff reporter
Four state-owned financial holding companies yesterday approved a plan to merge their investment trust subsidiaries into a larger, more competitive asset manager, aiming to cut operating costs, broaden product offerings and improve Taiwan’s position as a regional asset management hub.
The planned merger aims to achieve economies of scale by pooling resources, technology and distribution networks, allowing the combined company to improve operating efficiency and compete more effectively, executives said.
First Financial Holding Co (第一金控), Mega Financial Holding Co (兆豐金控), Taiwan Cooperative Financial Holding Co (合庫金控) and Hua Nan Financial Holdings Co (華南金控) said their boards and those of their investment trust subsidiaries had approved the deal.
First Financial Holding Co president Frank Fang, third right, and executives from Mega Financial Holding Co, Taiwan Cooperative Financial Holding Co and Hua Nan Financial Holdings Co pose for a photograph at a ceremony in Taipei yesterday.
Photo: CNA
First Securities Investment Trust Co (第一金投信) would be the surviving entity because of its larger asset base and stronger operating performance, they said.
The merger, which requires regulatory approval, is planned for Jan. 1, 2028.
First Securities Investment Trust would absorb Mega International Investment Trust Co (兆豐國際投信), Taiwan Cooperative Securities Investment Trust Co (合作金庫投信) and Hua Nan Investment Trust Co (華南永昌投信), with all of the approximately 370 employees to have the option to stay on.
The parent companies would hold stakes of 50.3 percent, 30.4 percent, 9.8 percent and 9.5 percent respectively in the combined firm.
The transaction would be conducted through a share swap, with First Securities Investment Trust issuing about 59.3 million new common shares.
The new company would retain the First Securities Investment Trust name, with First Financial controlling appointments to its top management positions, First Financial Holding president Frank Fang (方螢基) said.
The combined company is expected to benefit from lower operating costs and more effective use of the four groups’ distribution networks, Fang said, adding that a broader range of investment products should help improve profitability and shareholder returns.
First Securities Investment Trust president Richard Kao (高子敬) said that the entity’s assets under management would total about NT$500 billion (US$15.38 billion), including publicly offered funds and discretionary investment mandates.
The company aims to increase assets in publicly offered funds by 15 percent annually and those in discretionary investment mandates by 10 percent, Kao said.
To achieve those targets, it plans to develop products focused on retirement planning, sustainable investment, overseas asset allocation and wealthy clients, he said, adding that it intends to pursue opportunities arising from the government’s push to establish Taiwan as an Asian asset management hub.
The combined publicly offered fund assets of the four merging firms would rank about 12th among Taiwan’s investment trust firms and the merged entity would aim to break into the top 10, he said.
The merged company would have seven directors and two supervisors.
First Financial would appoint four directors and one supervisor, while each of the other three financial holding companies would appoint one director.
Mega Financial would appoint one supervisor.
The four merging companies pledged to protect employee and customer rights during the integration.
First Securities Investment Trust would assume responsibility for existing customers, whose rights would remain protected under applicable regulations.