Taipei:The boards of four state-controlled banks have approved a merger of their securities investment trust subsidiaries, with First Financial Holding Co. (First FHC) set to become the majority shareholder of the combined entity.

According to Focus Taiwan, executives from First FHC, Mega Holdings, Taiwan Cooperative FHC, and Hua Nan Financial announced the merger at a joint press conference held on Thursday. The merger will be executed entirely through a stock swap, as detailed by First FHC President Frank Y.C. Fang. Each common share of First Securities Investment Trust will be exchanged for 1.4532, 2.7321, and 4.414 shares, respectively, of the securities investment trust subsidiaries of Mega, Taiwan Cooperative, and Hua Nan, with a total issuance of 59,286,927 common shares.

After the merger, First FHC will hold a 50.3 percent stake in the new entity, to be named First Securities. Mega Holdings will hold 30.4 percent, Taiwan Cooperative 9.8 percent, and Hua Nan 9.5 percent. The merged company will feature a seven-member board consisting of four directors from First FHC and one each from Mega, Taiwan Cooperative, and Hua Nan. Additionally, it will have two supervisors, one each from First and Mega.

The merger is pending regulatory approval. Fang noted that the application is expected to be submitted to the Financial Supervisory Commission's (FSC) Banking Bureau by the end of this month, followed by submissions to the FSC's Securities and Futures Bureau and the Fair Trade Commission. The target completion date for the merger is set for January 1, 2028, due to the intricate process involved.

First Securities Investment Trust President Kao Tzu-ching highlighted that the combined assets under management of the four firms, including discretionary investment management, total approximately NT$500 billion (US$15.37 billion), placing them 12th in the domestic market. The aim of the merger is to leverage the combined resources to break into the top 10 or even the top eight in the market rankings.