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Article 51
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Upon the merger between two listed companies or between a listed company and an OTC company, the surviving company shall remain a listed company, and the terminated company shall publicly announce the de-listing of its securities. If by reason of the merger, the surviving company issues new shares or certificates of entitlement to new shares of the same class of stocks that are already listed, listing of the shares may commence from the record date of the merger; provided, trading of the originally listed securities shall be suspended eight trading days before the record date of the merger (and non-inclusive of that date), and an application shall be completed and filed with this Corporation, annexing the relevant documents, at least 15 trading days before the record date of the merger (and non-inclusive of that date).
Upon the merger between a listed company and an unlisted or non-OTC company, the surviving company shall remain a listed company. In addition to the special approval from the authority in charge of the industry concerned in the case of a securities, financial or insurance company, the following conditions shall be met:
1. The financial data of the unlisted company or non-OTC company that was merged and the consolidated financial data of the two merged companies satisfy the profitability requirements of listed companies enumerated in Article 4 of the Criteria for Review of Securities Listings. However, the said provision shall not apply where the net worth per share of the surviving company in the most recent financial year is higher than the net worth per share of the original listed company.
2. The unlisted company or non-OTC company being merged does not satisfy the circumstances specified in Subparagraphs 1, 4, 5, 8, 9, 10, and 13 of Paragraph 1 of Article 9 of the Criteria for Review of Securities Listings.
3. The most recent annual financial reports of the unlisted company or non-OTC company being merged have been audited by a certified public accountant approved by the Competent Authority to audit publicly listed companies, and the auditor gives an opinion without any reservations.
4. If the merged unlisted/non-OTC company is a foreign company meeting the conditions set forth in Article 21 of the Business Mergers and Acquisitions Law, the listed company shall obtain documentation of foreign investment approval by the Ministry of Economic Affairs Investment Commission. Also, the financial report submitted for the foreign company shall have been issued an audit report with an unqualified opinion by the attesting CPA, as well as an opinion by a Taiwan CPA regarding the differences in accounting principles applied in the Republic of China and in the foreign company's home country and the resulting effects on the financial report. In addition, a CPA other than the original attesting CPA, and approved by the Competent Authority to perform financial attestation for public companies, shall submit a written reference report analyzing and explaining the reasonableness of the share exchange ratio and price and overall synergy at the time of the merger between the listed company and the foreign company.
For the new shares issued as a result of the merger referred to in the preceding two paragraphs, if such shares are of a different class from the listed securities, then such shares shall conform to Paragraph 2 of Article 14 of the Criteria for Review of Securities Listings.
Where a listed company undertakes a merger pursuant to Paragraph 2, any directors, supervisors, and shareholders holding more than 10% of issued and outstanding shares of the company being merged shall comply with all the below-listed provisions for any new stock issued for capital increase due to the merger or overseas depositary receipts issued for capital increase due to the merger that they hold, provided, this requirement may be waived where a listed company merges with a subordinate company of which it holds 90 percent or more of the outstanding shares in accordance with Article 316-2 of the Company Law:
1. Such persons obtaining new shares issued for capital increase due to the merger shall place all such shares into centralized custody. The provisions of Paragraph 2 of Article 10 of the Criteria for Review of Securities Listings shall apply mutatis mutandis to the calculation of the ratio of new share issued as a result of the merger that should be placed in centralized custody. In case of shortage, negotiation shall be made with other shareholders holding new shares issued for capital increase due to the merger to make up the shortfall. Of the share certificates placed in central custody, one-fifth of the portion comprising 50 percent thereof may be withdrawn after the lapse of two full years from the listing date thereof; thereafter, a further one-fifth of such portion may be withdrawn once every six months. The remaining 50 percent may withdrawn in full after the lapse of six full months from the listing date thereof. However, these provisions may be waived where, pursuant to Article 316-2 of the Company Law, a listed company merges with a subordinate company of which it holds 90 percent or more of the issued shares.
2. Such persons obtaining overseas depositary receipts issued for capital increase due to merger shall provide a written undertaking that for a certain period of time they shall not redeem or transfer the overseas depositary receipts held by them, and shall incorporate provisions restricting redemption into the contract signed and entered into with the custodian institution. The total ratio of global depositary receipts subject to restriction of redemption or transfer and the period of the restriction shall accord with the provisions of the preceding subparagraph.
Where the merger between a listed company and other companies does not conform with the preceding four Paragraphs, or where a new company is created as a result of the merger, the original listed company shall apply for the termination of listing. The surviving company or the new company may apply for listing of stocks after completion of the merger.
Where a listed company, pursuant to the Business Mergers and Acquisitions Law, Company Law, or other laws or regulations, acquires shares, business, or assets of an unlisted/non-OTC company, with shares, cash, or other assets as the consideration, or acquires from a shareholder of an unlisted/non-OTC company his/her shares therein, or acquires in full or in part the business of an unlisted/non-OTC company through assignment by split, if such transaction reaches any of the following standards, such unlisted/non-OTC company shall additionally comply with all of the conditions set out in paragraph 2, and any director, supervisor, or shareholder holding 10 percent or more of the shares thereof who has holdings of the new capitalization shares or overseas depositary certificates issued by the listed company for such capital increase shall also deposit the share certificates into central custody in accordance with the provisions of paragraph 4:
1. If the book entry amount of shares, cash, or assets obtained by the unlisted/non-OTC company as a result of being acquired reaches 70 percent or more of its book net asset value, or the book entry amount of shares, cash, or assets paid by the listed company for the acquisition reaches 10 percent or more of its book net asset value.
2. If the total number of shares acquired from shareholders of the unlisted/non-OTC company reaches 70 percent or more of its issued shares.
3. If the operating revenue or operating profit or book net asset value of a division being spun off from the unlisted/non-OTC company to the listed company reaches 70 percent or more of its entire operating revenue or operating profit or book net asset value, or reaches 10 percent or more of the entire operating revenue or operating profit or book net asset value on the listed company's pro forma financial statements.
When a listed company files an application under Paragraph 1 and Paragraph 2, it shall fill in the application form and submit relevant documents (attachments). After the personnel of this Corporation makes examination and provides examination comments for approval, a written opinion approving the merger shall be sent to the company. The said written opinion shall state "This approval letter is provided for the applicant company to register (apply for) the issuance of new shares as a result of merger with the competent authority only. If the application is not approved by the competent authority, this approval letter shall become void."
If an unlisted/non-OTC company that is acquired or assigns business operations as set out in paragraph 6 is a foreign company, the provisions of paragraph 2, subparagraph 4 shall apply mutatis mutandis to its financial information and the matters required to be analyzed and explained.
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