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Case Title:

Standard Chartered: Consolidating its Presence in Taiwan

Publication Year : 2006

Authors: Joy Chakraborty, Kumar Satyaki Ray

Industry: Banking, Insurance and Financial Services

Region:Taiwan

Case Code: COS0079K

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
The London-based Standard Chartered Plc. had announced on September29, 2006 that it would purchase Taiwan-based Hsinchu International Bank for NT$ 40.5 billion ($1.2 billion) which would go down in the history books as Standard Chartered’s second biggest acquisition, after it acquired SC First Bank in Korea for $3.3 billion in 2005. The deal would allow Standard Chartered to realize its 10-year hunt to acquire a big target in Taiwan. It was the first application from an international bank to directly acquire 51-100% of a Taiwanese bank. Taiwan was the Asia’s fifth-largest economy and the island’s $ 700 billion banking industry had also earned the reputation of being the fourth biggest banking market in Asia. Taiwan had been in favour of promoting foreign investments in its banking sector and the deal to acquire Taiwan’s seventh-biggest private-sector bank by Standard Chartered was the latest manifestation of that. The deal would allow Standard Chartered not only to augment its earnings but also to achieve a two-digit Return On Investment (ROI) percentage figure by 2007. Analysts perceived that the deal would enable Standard Chartered to have one of the largest branch networks of any overseas bank on the island and make Taiwan its fourth biggest market in terms of income.

Pedagogical Objectives:

  • To understand the role of mergers and acquisitions in the growth strategy of banking companies
  • To analyse the benefits and drawbacks of acquisitions associated with banking companies
  • To study the impact of liberalisation on the Taiwanese banking sector
  • To understand the potential synergies of an acquisition.

Keywords : Mergers,Acquisitions,Alliances Case Study;Bank; Taiwan; London; Standard Chartered; Hsinchu; SC First Bank; ROI (return on investment); Assets; Dividend per share; SME (small and medium-sized enterprises); Taiwan's banking industry; Deal; Net profit; Hibank; Asia

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