TAIWAN Law and Practice Contributed by: Sarah Wu, Lee & Li Attorneys-at-Law
Lee & Li Attorneys-at-Law 8F, No 555, Sec 4 Zhongxiao E Rd Taipei 110055 Taiwan ROC
Tel: +886 2 2763 8000 Fax: +886 2 2766 5566 Email: attorneys@leeandli.com Web: leeandli.com
1. Market 1.1 Major Lender-Side Players
overall market at the beginning of 2025 is being affected by the US-China trade tensions, there continue to be cautious optimism. It is projected that the M&A market in Taiwan will continue to thrive, especially in the energy, medical, hi-tech, media and telecommunications industries. In addition, following KKR’s take-private of Taiwanese listed company LCY via a cash-out share swap in 2018, a syndicated loan facility agreement for the acquisition of Future Electron- ics was recently arranged by several local banks and participated by 14 financial institutions, representing the largest loan to semiconductor component distributors in the history of Taiwan. The USD1.9 billion loan facility agreement was completed on 2 February 2024, and the WT Group used such funds to complete the acqui- sition in April 2024. The trend shows that the leveraged buyout structure has become more widely used for acquisitions as a financing mechanism to retain more finan- cial and operational flexibility.
Acquisitions are primarily financed through equi- ty and debt financing in Taiwan. Equity financing is mostly structured in the form of equity injec- tion or short-term shareholder loans, which may be converted into equity with the approval of the Department of Investment Review of the Min- istry of Economic Affairs of Taiwan (DIR). Debt financing is usually structured to include, among others, a bridge loan or a mezzanine financing arrangement due to the flexibility offered by such arrangement, and, typically, senior secured term loans to finance the acquisition. The participants usually include conventional financial institutions (such as international banks and local banks) and private equity funds that have extensive experience in debt financing arrangements. 1.2 Corporates and LBOs According to data announced by the Adminis- tration of Commerce of the Ministry of Econom- ic Affairs of Taiwan, the total number of M&A deals in Taiwan in 2024 reached 252, marking an increase in transaction volume compared to 2023, despite a slight dip in total value, which was approximately USD1 billion. While the
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