| Summary: | 碩士 === 逢甲大學 === 財務金融學所 === 95 === Since the accelerating development of globalization and market liberalization, financial Institutions usually keep the advantage to adapt this formidable pressure from the vicious competition in the market, and the fastest way to implement this strategy is merger & acquisition. The ratio is critical since it does determine not only how the possible synergy gains are shared between the banks involved, but also whether the wealth positions of the stockholders change.
Exchange ratio is very important in stock exchange merger, the purpose of this paper is to study Tai-Shin Financial Holdings Company invests Chang-Hwa Bank on October 3, 2005, and examine whether the 1：1 exchange ratio of stock exchange merger on December 31, 2006 is controversial and rational. At first, according to the theory of company evaluation, the study would testify the exchange ratio claimed by the financial holding companies that would be reasonable by using the financial statements and prospectus. The second, the exchange ratios of bilateral negotiation parties could be inferred from the L-G model. Therefore, it could offer an access to testify the rationality of exchange ratios of the financial holding company or to estimate the bargaining bottom line of the parties in the merger negotiations.
The evidences from this study has shown that the exchange ratio estimated by the discounted cash flows model(or method) and the L-G exchange ratio is 1：0.81,this figure is overhand the stock exchange ratio, 1：1, claimed by the Tai-Shin Financial Holding Company is overestimated to enhance its own interests from the merger. According to the Price-to-Earning Ratio method or the Asset Appraisal Model, the estimated exchange ratio is approaching 1 to 1, but still an overestimated result.
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