Fubon Financial to buy majority control of First Sino Bank

Fubon Financial Holding, the second-largest publicly traded financial group in Taiwan, will buy majority control of First Sino Bank, in what is the largest acquisition of a mainland business by a Taiwanese investor.

The deal, valued at more than US$1 billion, reflects Taiwanese investors' growing interest in tapping the vast mainland market as the two sides consolidate their economic ties.

Fubon Financial, the most aggressive Taiwanese financial company to invest in the mainland, and its subsidiary Fubon Bank, will purchase a combined 80 per cent stake in First Sino for 5.65 billion yuan (HK$6.9 billion) from the existing shareholders, including Pou Chen Group, a Taiwanese footwear and retail company, Hong Kong's Wing Hang Bank and Shanghai Pudong Development Bank.

Following the purchase, Fubon Financial and Fubon Bank will participate in a share placement by First Sino, injecting an additional 800 million yuan into the Shanghai-based lender.

The total transaction value of 6.45 billion yuan will make the deal the largest Taiwanese investment on the mainland.

First Sino also will become the second mainland bank to be partly owned by Fubon, which bought a fifth of Xiamen Bank in 2008. Last year, Fubon also won regulatory approval to set up a joint-venture mutual fund house with Founder Securities, a stock brokerage controlled by Peking University.