The government is set to launch a fund in September that will encourage merger and acquisition (M&A) deals.
The National Development Council held a seminar on Thursday to explain how this new government fund will work. The goal is to stimulate short-term economic growth.
The council said the M&A fund will encourage domestic companies to integrate with each other to expand their scale and competiveness. It also said the fund can help Taiwanese firms acquire foreign companies to get access to technologies, brands, markets, and human resources.
The council said that if Taiwanese companies need to acquire other firms in order to improve Taiwan’s industry, the government fund can invest up to 30% of the necessary capital. However, an official with the council, Yen Shih-wei, stressed that companies hoping to benefit at the expense of competitors need not apply.
"If a company wants to acquire companies A, B, C, D, and E, it cannot apply for our fund’s assistance," said Yen. "We do not allow companies to just look at their own gains because the positive spillover effect for the industry as a whole is low, and this will not help the industry to grow," he said.
The council also said it will only transfer funds when companies themselves have raised at least 75% of the funds needed for the M&A deals within a year. In addition, companies that benefit from the government fund will only be allowed to allocate profits once the government fund has recouped all its investments in the M&A deals.