Newsletter
Amendment to the calculation of review period for merger control under the Taiwan Fair Trade Act
On 26 May 2017, the Legislative Yuan completed the third reading of the amendment to Article 11 of the Taiwan Fair Trade Act ("TFTA"), under which the review period for merger control has been revised from "30 days" with a possible extension of an additional "60 days" to "30 business days" with a possible extension of an additional "60 business days". According to media reports, this amendment mainly resulted from a combination notification filed by Advanced Semiconductor Engineering, Inc. ("ASE"), a Taiwan-based provider of independent semiconductor assembling and test manufacturing services, which announced a tender offer to purchase the outstanding shares of Siliconware Precision Industries Co., Ltd. The Taiwan Fair Trade Commission ("TFTC") received the notification filed by ASE on 4 February 2016, and had to complete the merger control review within 30 days upon receipt thereof (with a possible extension not exceeding 60 days) in accordance with the old Article 11 of the TFTA. However, the aforesaid period was spread over the Lunar New Year holidays, thereby causing the TFTC's review time to be unfairly reduced. This situation casts doubt on the fairness and soundness of the TFTC's decision. Therefore, in the amendment this time, the calculation of review period has been revised from counting calendar days to business days so that the review period for future major merger filing cases will not be unduly shortened due to successive national holidays. This amendment also precludes an acquirer of a hostile takeover from improperly fastening the review period by manipulation of the filing schedule.
In addition, to deal with the information asymmetry issue between the acquirer and the target in a hostile takeover, which is due to the old law not distinguishing "a combination with the parties' consent " from "a hostile takeover" in the review procedure, the newly added Paragraph 10, Article 11 of the TFTA further states that the TFTC has to provide necessary information to and seek opinions from the target in a hostile takeover so as to ensure the target's right to information and to express opinions. The amendment above has taken effect on 16 June 2017.