CTBC Buys Taiwan Life, Tokyo Star Bank in $1.4 Billion Expansion

CTBC Financial Holding Co. (2891) agreed to buy Taiwan Life Insurance Co. (2833) and Tokyo Star Bank Ltd. for a total of about $1.4 billion as it seeks to diversify and expand outside its crowded home market.

The island’s fourth-largest financial company by market value will buy 100 percent of Taiwan Life in a share swap valued at about NT$26.6 billion ($904 million), based on a CTBC share price of NT$19, CTBC President Daniel Wu said at a press conference in Taipei. The company will also pay 52 billion yen ($529 million) in cash for 98 percent of Tokyo Star, Executive Vice President Rachael Kao said.

In buying the Japanese lender, CTBC Financial follows competitors in expanding outside a home market where competition has squeezed lending margins to the second-lowest in Asia Pacific. Taiwan Life was the first life insurer established on the island, according to its website.

Shares of CTBC Financial fell 0.3 percent to NT$19.90 in Taipei today before the announcement. Taiwan Life gained 3 percent to NT$26.10, valuing it at NT$24.4 billion.

To contact the reporters on this story: Argin Chang in Taipei at achang153@bloomberg.net; Stephanie Tong in Hong Kong at stong17@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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