China Development Cosmos merger approved
Taiwan News, Staff Writer
2014-04-08 01:51 PM
China Development Financial (2883) and Cosmos Bank (2837) simultaneously held provisional shareholder’s meetings Tuesday. Both parties voted to approve the merger of China Development and Cosmos. This is the Taiwan financial market’s first merger of listed commercial banks in the past six years.

China Development and Cosmos’s February board meeting simultaneous approved China Development’s acquisition of 100% of Cosmos shares through a share exchange of NT$13.4 cash and NT$0.2 in China Development shares per Cosmos share totaling NT$23.09 billion. Both parties convened provisional shareholder meetings Tuesday to approve the merger with completion expected before the end of July. China Development wishes to obtain a commercial banking license through the acquisition of Cosmos to expand its deposit base and develop a consumer banking business.

China Development approved the merger with Cosmos with 79.07% of shareholders in favor and Cosmos approved the merger with China Development with 90.73% of shareholders in favor.

This is the Taiwan financial market’s first merger of listed commercial banks in the past six years. After approval, major Cosmos shareholders, S.A.C. Private Capital Group and GE Capital will successfully divest themselves of this bank holding and China Development will move towards commercial bank development, transferring its industrial bank to venture capital operations.

Recently, Cosmos’s labor union called the sincerity of China Development towards Cosmos employee welfare into question. The union adopted the slogan of “reject black box mergers” and approved a strike with 95% voting in favor. However, this did not affect the approval of the merger resolution.

Cosmos’s labor union is dissatisfied with China Development’s promise not to lay off staff for one year and plans to strike or protest in the beginning of May. The Financial Supervisory Board recently stated that other banks will be asked to offer support at that time to ensure uninterrupted operation at Cosmo and to prevent affecting customer interests.

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