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53-2
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Where a TWSE listed company merges with a company that is neither listed on the TWSE nor on the Taipei Exchange, by using as consideration a follow-on issue (whether by public offering and issuance or private placement) of shares or securities that may be converted into or may be used to subscribe shares, and the surviving company after the merger remains a TWSE listed company, except in the case of a securities, financial, or insurance company with special approval from the authority in charge of the industry concerned or where the TWSE listed company merges with a subsidiary of which it holds 90 percent or more of the outstanding shares, all the following conditions shall be met by the company that is neither listed on the TWSE nor on the Taipei Exchange:
- The financial data of the merged company that is neither listed on the TWSE nor the Taipei Exchange and the consolidated financial data of the merging and merged companies satisfy the profitability requirements of TWSE listed companies enumerated in Article 4 of the TWSE Rules Governing Review of Securities Listings; provided, the above shall not apply under either of the following circumstances:
- The net worth per share of the surviving company, both in the most recent financial year and on the most recent pro forma financial report, is higher than the net worth per share of the original TWSE listed company. Where the above proviso is satisfied, if the TWSE listed company or the merged company that is neither TWSE listed nor Taipei Exchange listed, from the date next following the date of the balance sheet in the most recent financial report to the date the application is filed with the TWSE, undergoes any material change in capital affecting the net worth per share, such as a capital increase or reduction or distribution of dividends, the net worth per share of the surviving company shall be higher than the net worth per share of the original TWSE listed company, and the attesting CPA shall submit a review opinion following the imputed adjustment.
- An express opinion of the Industrial Development Bureau, Ministry of Economic Affairs is obtained concluding that the merger will improve synergy effectively.
- The merged company that is neither listed on the TWSE nor the Taipei Exchange is free of the circumstances specified in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 7, 8, and 12 of the TWSE Rules Governing Review of Securities Listings.
- The most recent annual financial reports of the merged company that is neither listed on the TWSE nor the Taipei Exchange have been audited by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports of public companies, and the auditor issues an unqualified opinion.
Where a TWSE listed company merges with a foreign company meeting the conditions set forth in the Business Mergers and Acquisitions Act, the foreign company, unless it is a TWSE (or Taipei Exchange) primary listed company or TWSE (or Taipei Exchange) secondary listed company, or its stock is listed and traded on the main board of an overseas securities market approved by the Competent Authority, or it is a subsidairy of which the TWSE listed company holds 90 percent or more of the outstanding shares, shall comply with the provisions of Article 53-3, paragraph 1, subparagraph 2, and the TWSE listed company additionally shall submit the following documents:
- Documentation of foreign investment approval by the Ministry of Economic Affairs Investment Commission.
- An opinion by a Taiwan CPA regarding the differences in accounting principles applied in the Republic of China (Taiwan) and in the foreign company's home country and the resultant effects on the financial report.
- A written report analyzing and explaining the reasonableness of the share exchange ratio and price and overall synergy at the time of the merger between the TWSE listed company and the foreign company, issued by a CPA other than the original attesting CPA who is approved by the Competent Authority to perform auditing and attestation of financial reports of public companies.
For the purposes of this chapter, an overseas securities market approved by the competent authority is as defined in Article 23 of the Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.
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