TAIWAN Law and Practice Contributed by: Eddie Chan, Derrick Yang, Winnie Lin and Yuan-Yuan Lo, Lee and Li Attorneys-at-Law
and substantive flaws in the fairness opinion issued by an independent expert. Asia Pacific Telecom was compelled to reconvene a shareholders’ meeting in order to rectify the procedur- al flaws and eventually adopted the new resolutions pertaining to the approval of the merger. This conten- tious case serves as a stark reminder that even techni- cal procedural flaws in a resolution can have adverse consequences on the outcome of a public deal. The scope and focus of due diligence in technology M&A transactions in Taiwan have evolved consider- ably in recent years, mirroring global trends while also responding to local market dynamics. Notably, areas such as cybersecurity, data privacy and regulatory compliance have become increasingly central to the due diligence process. 9.2 Technology Company Due Diligence As Taiwan advances its digital transformation initiatives and strengthens data protection laws, buyers are pri- oritising the evaluation of a target company’s cyberse- curity infrastructure and data privacy protocols. This focus not only safeguards sensitive information but also helps mitigate risks associated with regulatory non- compliance. In addition, regulatory compliance dili- gence has extended beyond traditional corporate and financial reviews to encompass a detailed assessment of adherence to industry-specific regulations, export controls, and emerging technology-related standards. This comprehensive approach enables buyers to better identify potential liabilities and operational risks, facili- tating more informed investment decisions. 9.3 Data Privacy The Personal Data Protection Act (PDPA) is the main statute governing personal data protection in Taiwan. The PDPA applies to all data collection and process- ing activities in Taiwan, regardless of the nationality of the data subjects. Generally, international data trans- fers are permitted under the PDPA, unless prohibited or restricted by the regulators. Consent from data sub- jects is required for the collection, processing and use 9. Due Diligence/Data Privacy 9.1 Due Diligence Process
of their personal information, with some exceptions or additional restrictions based on circumstances. Due to these restrictions, when providing due diligence documents, a target company, such as a technol- ogy company, would remove personally identifiable information. This means that the acquirer will only learn the identity of the target company’s employees, independent contractors or individual co-operating partners near or at the completion of the transaction.
10. Disclosure 10.1 Making a Bid Public
A public company is required to disclose any mate- rial contracts, letters of intent and memorandums that it executed. Additionally, any resolutions adopted by the board of directors of a public company that have a significant impact on the share price or the invest- ment decision of the investors are required to be dis- closed. In practice, on the date of a board meeting approving a merger or an acquisition or on the date of executing a binding legal document between the public company and the other party to the merger or acquisition, an announcement must be made on the In a tender offer where the consideration is in the form of shares, such shares must be (i) domestic securities traded on the Taiwan Stock Exchange or the Taipei Exchange or (ii) foreign securities prescribed by the FSC. A prospectus is required for the issuance of new shares of the offeror in a tender offer. 10.3 Producing Financial Statements A public company is required to obtain the bidders’ financial statements so as to determine the fair price of a transaction in the case of a stock-for-stock trans- action, while whether or not the financial statements should be prepared based on GAAP or IFRS is not specially required. Market Observation Post System. 10.2 Prospectus Requirements 10.4 Disclosure of Transaction Documents The parties are required to file copies of the trans- action documents for certain governmental reviews, including applications for the merger, investment approval, tender offer, corporate registration, etc.
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