TAIWAN Trends and Developments Contributed by: Eddie Chan, Derrick Yang, Winnie Lin and Yuan-Yuan Lo, Lee and Li Attorneys-at-Law
• spin-offs; • share swaps; and • acquisitions between enterprises.
merger involving a tender offer, the SEA and related regulations mandate that the offeror should adhere to specific procedures and report to the Financial Supervisory Commission. This is to ensure that all shareholders have the opportunity to make informed decisions under fair and equal conditions when pre- sented with an acquisition offer. In the case of a tender offer, the target company shall form a review commit- tee consisting of at least three independent members (including independent directors) to assess the tender offer and provide its recommendation to the share- holders within 15 days of receiving the offer. Company Act and Labour Standards Act The Company Act governs general corporate matters while the Labour Standards Act governs labour and employment-related matters. Both Acts supplement the items that are not otherwise provided for under Before proceeding with an M&A transaction, compa- nies must assess whether such transaction constitutes a notifiable combination type and whether it reaches the notification thresholds, including turnover thresh- olds and market share thresholds. If the transaction meets the type and reaches the notification threshold, the company must file a merger control notification to the Fair Trade Commission in advance and may only proceed with the combination after obtaining clear- ance from the Fair Trade Commission. Conclusion Looking ahead to 2026, it is anticipated that technol- ogy M&A in Taiwan will continue to thrive. Govern- ment support and international market demand will advance M&A transactions with a focus on particular fields, including semiconductors, AI, IoT and green technology. When conducting M&A in Taiwan, securing the neces- sary regulatory approvals is essential for the success- ful completion of a transaction, given the various legal requirements involved. Investors are therefore advised to seek professional advice beforehand to gain a thor- ough understanding of the regulatory prerequisites and application procedures. Additionally, understand- ing the local business culture and market dynamics is the M&A Act. Fair Trade Act
The primary goal of this law is to facilitate the legal- ity and efficiency of M&A activities while ensuring the protection of the rights and interests of stakeholders, including shareholders, employees and creditors. The shareholders have the right to information disclosure and protection mechanisms to ensure fair treatment during the M&A process. If the terms of the M&A transaction are unfavourable to the shareholders, the dissenting shareholders have the right to demand that the company repurchase their shares at a fair price. The law also requires the acquiring company to prop- erly handle employees’ rights, including retention or severance arrangements. Furthermore, if certain con- ditions under the M&A Act are met, tax exemptions and benefits may apply. The M&A Act was last amended in December 2022, seeking to enhance the flexibility of M&A transactions and safeguard shareholders’ rights. Key amendments include: • requiring directors to disclose their personal interests and reasons for supporting or opposing a transaction at board and shareholders’ meetings; • relaxing restrictions on shareholders’ appraisal rights so that the dissenting shareholders may vote against the proposal, instead of abstaining, and still exercise the appraisal right; and • expanding the scope of asymmetric M&A, which can be approved by a special board resolution. Securities and Exchange Act (SEA) The SEA and its related regulations impose additional requirements on public companies involved in M&A transactions, including: • disclosure of information; • protection of shareholders’ rights; and • prevention of insider trading, market manipulation and improper transfer of benefits. Furthermore, if there is a plan to acquire more than 20% of a public company’s shares within 50 days, it may trigger a mandatory tender offer. In the case of a
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