Acquisition of China Life this year, says China Development

• By Kao Shih-ching / Staff Reporter

China Development Financial Holding Co ( ) said on Thursday that it aims to complete the acquisition of China Life Insurance Co ( ) by the end of this year by acquiring all remaining shares of the company through a share swap.

The company’s boards of directors approved the proposed share exchange, under which one China Life common stock would be exchanged for 0.8 China Development common stock, plus 0.73 China Development preferred stock and a cash bonus of NT$11. .5 per share, they said.

China Development would issue 2.07 billion new common shares and 1.89 billion new preferred shares that would be exchanged for China Lifes common stock, they said.

Photo Courtesy of China Life Insurance Co

China Development said it would consider several options, including issuing corporate bonds, to fund the deal.

Through two tenders completed in September 2017 and February this year, China Development increased its stake in China Life to 55.95 percent.

The company expects to complete the acquisition of the remaining 44.05 percent in the life insurance company if shareholders approve the deal at a meeting on Oct. 1.

The acquisition, while including the issuance of new shares, would not necessarily weaken our earnings per share, as it would give us full ownership of China Life and allow us to benefit from the profits of the insurers, which should contribute a lot, China Development spokesman Richard Chang () told the Taipei Times by phone on Friday.

Based on the closing price of China Lifes share price of NT$26.9 and China Developments share price of NT$13.85 on Thursday, China Development has offered a 17.3 percent premium for China Life shares, it said. chang.

The deal is unusual in that China Development would not only offer immediate cash to China Lifes shareholders, but also give them access to its own preferred stock with an annual dividend yield of 3.55 percent, he said.

Following the full acquisition of China Life, China Development would aim to strengthen its insurance business, as well as its banking and securities operations, the company said, adding that it would boost its overall growth.

China Development said it would step up efforts to accelerate the integration of its three main businesses, banking, insurance and securities.

Both companies plan to exchange shares by the end of this year, pending approval from the Financial Supervisory Commission, Chang said.

China Life would be delisted after the takeover of the Taiwanese exchange, Chang said.

Additional reporting by CNA