Date of announcement 2024/07/19
Time of announcement 17:51:00
Date of events 2024/07/19
To which item it meets paragraph 20

1.Type of merger and acquisition (e.g., merger, spin-off, acquisition, or
share transfer):Share swap
2.Date of occurrence of the event:2024/07/19
3.Names of companies participating in the merger and acquisition (e.g., name
of the other company participating in the merger or consolidation, newly
established company in a spin-off, acquired company, or company whose shares
are taken assignment of):
KGI Bank (”KGIB”) plans to incorporate China Development Asset Management
Corporation (”CDAMC”) as a wholly-owned subsidiary through a share swap.
4.Counterparty (e.g., name of the other company participating in the merger
or consolidation, company taking assignment of the spin-off, or counterparty
to the acquisition or assignment of shares):
The sole shareholder of CDAMC, CDF.
5.Whether the counterparty of the current transaction is a related party:Yes
6.Relationship between the counterparty and the Company (investee company in
which the Company has re-invested and has shareholding of XX%), and
explanation of the reasons for the decision to acquire, or take assignment
of the shares of, an affiliated enterprise or related person, and whether it
will affect shareholders' equity:
KGIB and CDAMC are both wholly-owned subsidiaries of CDF. KGIB has
engaged an independent expert to provide fairness opinions on the share
swap ratio. The transaction will not affect shareholders' equity.
7.Purpose and conditions of the merger and acquisition,
including the reason, consideration conditions and
payment schedule of the merger and acquisition:
(1) Reason: After the share swap is completed, CDAMC will be transformed
from being CDF's first-tier subsidiary to becoming a wholly-owned
subsidiary of KGIB.
(2) Consideration conditions: KGIB will issue 0.85976612 common share in
exchange for each common share of CDAMC.
(3) Payment schedule: Tentatively set for the end of October, 2024, and
to be discussed and determined by KGIB's and CDAMC's Board of
Directors or their designated persons as needed after the competent
authorities approve the share swap.
8.Anticipated benefits of the merger and acquisition:
Strengthen business dealings with CDAMC and achieve CDF's reorganization
goal of focusing on key subsidiaries.
9.Effect of the merger and acquisition on net worth per share and earnings
per share:
This share swap involves two wholly-owned subsidiaries of CDF. There will
be no material effect on net worth per share and earnings per share.
10.Type of merger consideration and source of funds:
The total consideration to be paid by KGIB for the share swap is
NT$ 1,428,207,766. KGIB is expected to issue 97,463,087 common shares
with a par value of NT$ 10 each, which means increasing the capital
by NT$ 974,630,870.
11.Share exchange ratio and basis of its calculation:
(1) Share exchange ratio: KGIB will issue 0.85976612 common share in
exchange for each common share of CDAMC.
(2) Calculation basis: The nature of this transaction is an internal
organizational restructuring within the Group. The calculation of the
share swap ratio is derived from the equities of KGIB and CDAMC as
stated in their respective reviewed financial statements as of March
31, 2024, after deducting the 2023 cash dividends. The calculation
also referenced the fairness opinion issued by Yuanhe CPA firm.
12.Whether the CPA, lawyer or securities underwriter issued an unreasonable
opinion regarding the transaction:No
13.Name of the CPA, law or securities firm:Yunahe
14.Name of the CPA or lawyer:Sophie Juan
15.Practice certificate number of the CPA:83TaiCaiZhengDeng(Liu)Zi No.2719
16.Independent expert's report on the reasonableness of the share exchange
ratio and the cash or other assets paid to the shareholders (1.The method,
principles, or calculations adopted for determination of the public tender
offer price, and comparison with the market-value method, cost method, and
discounted cash flow method commonly used internationally; 2.comparison of
the financial condition, profit status, and price-to-earnings ratio of the
subject company with those of TWSE or GTSM listed companies in the same
industry; 3.if a price appraisal report of an appraisal organization is
taken into account in the public tender offer price, the opinion shall
specify the content and conclusion of the appraisal report; and 4.if assets
or shares of the subject company, or of the surviving company in the case of
a merger, are listed as collateral in the tender offeror's financing
repayment plan, the opinion shall disclose the collateralization terms, and
assessment of the impact on the financial and operational soundness, of the
subject company or of the surviving company of the merger.):
(1) This transaction is a share swap, not a public tender offer.
(2) According to CPA's assessment, the price range per share for KGIB is
between NT$14.591 and NT$14.654, while for CDAMC it is between
NT$12.599 and NT$13.473, and the reasonable swap ratio range between
KGIB and CDAMC is 0.85976612 to 0.92336147 KGIB share in exchange for
each CDAMC share. The expected swap ratio for this transaction,
0.85976612 KGIB share in exchange for each CDAMC share, is fair and
reasonable.
17.Scheduled timetable for consummation:
Tentatively set for the end of October, 2024, and to be discussed and
determined by KGIB's and CDAMC's Board of Directors or their designated
persons as needed after the competent authorities approve the share swap.
18.Matters related to assumption by the existing company or new company of
rights and obligations of the extinguished (or spun-off) company:
Not applicable
19.Basic information of companies participating in the merger:
KGIB: commercial banking
CDAMC: acquisition and management of monetary claims of financial
institutions
20.Matters related to the spin-off (including estimated value of the
business and assets planned to be assigned to the existing company or new
company; the total number and the types and volumes of the shares to be
acquired by the split company or its shareholders; matters related to the
reduction, if any, in capital of the split company) (note: not applicable
other than where there is announcement of a spin-off):Not applicable
21.Conditions and restrictions on future transfers of shares resulting from
the merger and acquisition:None
22.Post-merger and acquisition plan:
(1) Willingness to continue operating the business of the company,
and the contents of plans to that effect
(2) Dissolution; delisting from an exchange (or OTC market);
material changes in organization, capital, business plan,
financial operations and production; accommodation or
utilization of staff and assets critical to the Company;
or any other matter of material significance that would
affect the company's shareholder equity:
After the share swap is completed, CDAMC will be transformed from being
CDF's first-tier subsidiary to becoming a wholly-owned subsidiary of KGIB.
23.Other important stipulations:None
24.Other important matters concerning the merger and acquisition:None
25.Whether the directors have any objection to the
present transaction:No
26.Information regarding directors with personal interest (name of natural
person director or name of legal person director and its representative,
material interest of the director or the legal person represented by the
director (including but not limited to form of actual or expected investment
in another company in the merger, shareholding, transaction price,
participation in the subject company's business or otherwise, and other
terms of investment), reason for recusal or otherwise, details of recusal,
and reason for a resolution for or against the merger proposal):
KGIB Chairman Paul Yang, Director Julian Yen and Director Jenny Huang,
acting as CEO & Director, Senior EVP & General Counsel, and CFO of CDF
respectively, recused themselves from discussions and votes.
27.Whether the transaction involved in change of business model:No
28.Details on change of business model:Not applicable
29.Details on transactions with the counterparty for the past year and the
expected coming year:Not applicable
30.Source of funds:Not applicable
31.Any other matters that need to be specified:
The transaction could only be executable with approval from the
competent authorities.