TaiwanM&ASummarySheet

Typesofcombination

Merger:2+companiesandonesurvives,assumingallrightsandobligations

Consolidation:allparticipatingcompaniesdissolvedandformabrandnewcompany

Acquisition:stockacquisition,assetacquisitionorgeneralbusinesstransferwithcash,acquirersstock,or
otherassets

Maingoverningbodies/disclosurerequirements

FinancialSupervisoryCommission:forfilingwithin10daysofacquisitionifacquiresmorethan10percent
oftotalissuedshares(statingpurposeandfundingsource,fileatfifthdayofeachmonththenumberofshares
itholdstheprecedingmonthandthemainbodyforgoverningtheM&Aactivitiesoflistedcompanies

FairTradeCommission:forthefairtradeact

MinistryofEconomicAffairs:forfilingwithin15daysofmergercompletionandinterprettheBusiness
MergersandAcquisitionsAct

Shareholders:meetingagenda,detailedinformationonproposedtransaction,terms,valuationreport

Creditor:notificationwithin30dayspostcompletion

Companywebsite:announceanddisclosebackgroundandprincipaltermsoftransactionwithin2daysof
approvaloftransactionbyboardofdirectors

Mainlawandregulations

CompanyAct:dutiesofboard(dutyofloyaltyanddutyofcare),mergers,salesofassets,businesstransfer,
votingrequirements,formationanddissolution

BusinessMergersandAcquisitionsAct:dutyofboardtoactinbestinterestofshareholderswhenpassing
resolutionforbusinesscombination

SecuritiesandExchangeLaw:salesofshares,tenderoffer,proxysolicitation,disclosurerequirements

RegulationsGoverningtheOfferingandIssuanceofSecuritiesbySecuritiesIssuers:salesofshares,tender
offers,proxysolicitation,disclosurerequirements

TaiwanStockExchangerules:reportingobligationsandtradingrestrictions

FairTradeAct:antitrustobligations,30daysinadvancefilingifoneoftheinvolvedpartieswillhave33%of
marketshareaftertransaction,onehas25%marketsharebeforetransaction,onesturnoverexceedsthreshold
amountannouncedbyFTC(exceedingNT$10bnandNT$1bnrespectively),willalsoonacasebycasebasis
determinewhetherthecompanyaftercombinationwillmonopolize/dominatethemarket,createadditional
barrierstoentry,affectmarketstructure/degreeofmarketconcentration

Foreigninvestmentregulatoryscheme:prohibited(nationalsecurity,postalservice,defenseandmilitary),
restricted(civilaviation),permissible(therest);investmentfromChinaarealsosubjecttoamorestringentset
ofapprovalprocess/criteria

Transactiondocuments

Mergeragreement(Taiwanlaw)

Shareswapagreement

Sharepurchase/subscriptionagreement(Taiwanlaw)

Assettransferagreement

Shareholders/votingagreement(Taiwanlaw)

Transitionagreement

Escrowagreement

Executiveemploymentagreement

Financing

Notaconditiontoatenderofferorothermerger&acquisitionsituations

Ifabuyerneedsdebtfinancingtocompleteatransaction,thesellermayrequirethebuyertoprovideandattach
therelevantfinancing/commitmentdocumentstothetransactionagreement

Ifmergertransactiontriggersacreditorprotectionprocedure,thecompanyshouldwaitforatleast30days
afterapprovalofmergerbyshareholdersatshareholdersmeetingbeforeitcouldconsummatethetransaction,
duringthisperiod,thecreditormaydemandrepaymentoradditionalcollateralfortheirdebt

TenderOffer

Offerortofileanapplicationwithterms&conditionsoftheproposedtenderoffertotheTSE3daysbeforethe
tenderdatefortheTSEtoannouncethesame

However,offerorhasthechoicetobypasstheTSEbutitmustfiletotheSFB(Article282)(unlessacquiring
forlessthan5%ortheofferoralreadyholdsmorethan50%)andpubliclyannounced(e.g.throughads,radio,
telecommunication,letter,telephoneetc
Publictenderofferprospectus

Mandatecontrolenteredbetweenofferorandtenderoffer(Article15)

Powerofattorney(ifany)

2daysafterexpiryofthepublictenderoffer,filetoSFB

Nameortradename,domicileorlocationofthetenderofferor

Nameofpubliccompanywhosesecuritiesarebeingacquired

Typeofsecuritiesacquired

Publictenderofferperiod

Lowerandupperthresholdsagreed

No.ofactualsecuritiesbought

Time,manner,placeforpaymentofpurchaseconsideration

Tenderofferormustmandateasecuritiesfirm,banks,institutionapprovedbytheSFBresponsibletotakethe
depositofsecurities,deliveryofpublictenderofferprospectus,receptandpaymentofpublictenderoffer
fundsorsecurities

Boardofdirectortargetcompanymustrespondtoatenderofferbid,formareviewcommittee(fairnessand
reasonablenessofterms),providerecommendationtoshareholderswithin7daysafterbeingnotifiedofthe
tenderofferandfiletoTSE/GreTai,SecuritiesandFutureInvestorsProtectionCenter(Article431):
Typeandnumberofsharesheldbydirectors,supervisoryandmajorshareholdersholdingmorethan

10%
Recommendationmadetotargetsshareholders

Majorchangestothefinancialscomparedwiththelastreport

Otherimportantinformation

Theofferormustalsodiscloseafter10daysaftertheacquisitiontotheFSB

Identity,name,corporatename,nationalidentificationcardnumber(companyuniformnumber)ofthe

investor
Totalnumberofsharesheldatthetimeofthefiling

Methodanddateofacquisition

Purposeofacquisition

Breakdownofsourcesofcapital

Totalnumberofsharesexpectedtobeacquiredwithinoneyear

Reviewcommitteemusthaveatleast3members,iftheresindependentdirectorsofthetargetcompany,they
willindefaultbythereviewcommittee,decisionofthecommitteemustbesupportedbysimplemajority

Mustbepublishedonthenewspaper,fillingandprospectusuploaded,targetcompanymustfiletheprospectus
totheTaiwanStockExchangeandmakeapublicannouncementontheMarketObservationPostSystem
(MOPS)withinformationofcurrentshareholderwith10%ormoreshares,recommendationofthetender
offer,MACtothefinancialscomparedwiththelatestreports,otherimportantinformation

SubjecttofilingrequirementwithFSC,tenderofferormustspecifyalowerthresholdandupperthresholdfor
thenumberofsharesthatitintendstoacquire,andofferornotobligatedtopurchaseanyofthesharestendered
iftheactualnumberofsharestenderedfallsbelowtheminimumnumbersetbytheofferorattheoutsetand
couldonlywithdrawofferundercertaincircumstancessuchasMAE(upto2014,nocasesuspendeddueto
MAE)orinsolvencyofthetargetcompany

Ifproposedtoacquire20%ofmorewithina50daytimeframe,themandatorytenderofferruleistriggered
(publictenderoffermustbemadewithidenticalpurchaseconditions)

Thepublictenderofferperiodmustbeatleast10calendardaysbutnotmorethan50calendardays,could
extendforanother30daysuponapprovalfromFSB

Successfultenderofferonly:relevantgovernmentapproval/filing(mainlyFSCasmentionedabove)required
hasbeenobtainedandnotifiedwithin2daysaftersatisfactionoftheconditionsofthetenderoffer

Thetransactionpartiescouldestablishotherconditionsprecedentbasedonownrequirements

Poisonpills&staggeredboard(antihostile)arenotpermissibleunderTaiwanlaw

UnderCompanyLaw,wheneveracompanyacquiresmorethan33%ofanothercompany,theacquiring
companymustnotifythetargetcompanyinwritingwithinonemonthfollowingthetransaction

Squeezeout

Nostatutorysqueezeoutmechanism,amajorityshareholderhasnorighttoforcetheminorityshareholdersto
sell

Maybesqueezedoutthroughcashoutmerger

Minorityshareholderscouldonlyaskforanappraisalrightsofthesharesbygoingtocourt(usuallywillget
fairpricewhichisthemarketprice,couldbeevenlowerthanthatofferedbythecompany)

Approvals

Majorityvoteatshareholdersmeetingattendedbytwothirdsoftheshareholders

Ifshortofthetwothirdsquorum,resolutionmaybeadoptedbytwothirdsoftheshareholderspresentatthe
generalmeeting

Ifformergerbetweenparent&subsidiary(90%ownedbyparent),boardofdirectorsapprovalwillbe
sufficient

Minorityshareholderscouldgotocourtonthebasisthattheirsharesarepurchasedatafairprice

FeesorTax

Noregulatoryfeesorstamptaxpayable

Salesofissuedstocksecurities,sellerwillneedtopaysecutiriestransactiontaxattherateof0.3percent

Majorsemiconductorsdealsin201415
IntelAltera

NXPFreescale

AvagoBroadcom

InfineonIRT

IntelAxxia

ADIHittite

CirrusWolfson

RFMDTriquint

QualcommCSR
CypressSpansion