An M&A Case Study in Taiwan: Citibank’s Acquisition of Bank of Overseas Chinese
Date Issued
2011
Date
2011
Author(s)
Wang, Harvey
Abstract
There has been a rush for mergers and acquisitions in the world, and more so in the financial industry in recent years. At the beginning of this century, the Taiwan government proposed two financial reforms in hope of improving the industry’s overall competitiveness by M&A. Nevertheless, a series of frauds as a result of administrative deficiencies overshadowed the government’s efforts. At around the same time, Citibank made a public announcement of its plan to acquire the Bank of Overseas Chinese (BOOC). The two banks, with their vastly different backgrounds, would definitely turn a new leaf in the history of Taiwan’s financial industry if they were able to complement each other well upon a successful merger. Why did Citibank favor BOOC over other domestic banks or what are there worthwhile in the process for others to learn from? The study begins with a description and analysis of the target industry and company of the M&A, followed by the M&A motives, including identification of the key factors associated with the process of the this M&A transaction. Bits and pieces of information were sorted and integrated to give readers a complete picture of the M&A. Synergies achieved by Citibank through the M&A were analyzed. The conclusion of the study includes an examination of the impact of the M&A on Citibank and Taiwan’s banking industry, and some directions for other domestic or international enterprises with a prospective M&A plan in mind. In essence, an enterprise wouldn’t go wrong in any M&A transaction by following to the fundamentals and modifying some finer details according to industry and company-specific attributes, that to reduce the likelihood of making a mistake during the M&A process, and hence increase the likelihood of success of M&A no matter how unpredictable some external factors may be.
Subjects
Mergers and Acquisitions
M&A
Citibank
Bank of Overseas Chinese
Taiwan Banking Industry
Type
thesis
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