TAIWAN Trends and Developments Contributed by: Eddie Chan, Derrick Yang, Winnie Lin and Yuan-Yuan Lo, Lee and Li Attorneys-at-Law
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 dis- senting shareholders may vote against the pro- posal, 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 disclo- sure 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 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 presented with an acquisition offer. In the case of a tender offer, the target company shall form a review com- mittee consisting of at least three independent members (including independent directors) to assess the tender offer and provide its recom- mendation to the shareholders 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 other- wise provided for under the M&A Act. Fair Trade Act Before proceeding with an M&A transaction, the companies must assess whether such transac- tion constitutes a notifiable combination type and whether it reaches the notification thresh- olds, including turnover thresholds 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 clearance from the Fair Trade Com- mission. Conclusion Looking ahead to 2025, it is anticipated that the technology M&A in Taiwan will continue to thrive. Government support and international market demand will advance the M&A transac- tions with a focus on particular fields including semiconductors, AI, IoT, and green technology. When conducting M&A in Taiwan, securing the necessary regulatory approvals is essential for the successful completion of a transaction, given the various legal requirements involved. Investors are therefore advised to seek profes- sional advice beforehand to gain a thorough understanding of the regulatory prerequisites and application procedures. Additionally, under- standing the local business culture and market dynamics is crucial for navigating potential chal- lenges and maximising the benefits of the trans- action. By taking a strategic approach and lev- eraging local expertise, investors can enhance their chances of achieving a successful and seamless integration, ultimately contributing to the growth and competitiveness of their busi- ness in Taiwan’s dynamic market.
394 CHAMBERS.COM
Powered by FlippingBook