IFLR 1000
The Guide to the World's Leading Financial Law Firms

It is generally accepted that Taiwan is over-banked, with too many institutions creating excessive competition and reducing product prices and overall profits. Structurally this problem needs changing and consolidation is now being viewed as the obvious solution: "New M&A led by state-controlled banks will help the banking sector solve its over-banking problem," says one partner.

Appropriate consolidation has been proposed and state-controlled banks with higher market shares taking over smaller state banks are a possibility. Mergers led by three major financial holding companies in Taiwan, Cathay Financial Holdings, Chinatrust Financial Holding and Fubon Financial Holding can also help, but as one partner says: "Ultimately it may still require some fundamental changes to the system."

With Southeast Asia opening for more cross-market exchanges and more confidence expected from international investors a growth in capital markets work is expected. The Taiwan stock exchange, with a total market capitalization of $800 billion, aims to have 55 IPOs and Taiwan Depositary Receipts (TDR) issuances this year. "Taiwan's strength is in technology, manufacturing and food products", says a partner, and "these are the areas that companies will be listing in".

With the signing of a major trade pact with China, Taiwan's capital markets has become more competitive, with many overseas Taiwanese investors studying the possibility of listing on the domestic stock exchange. "International investors pay attention to Taiwan's capital markets because of the production to major high-tech companies," says another partner. These include companies such as Taiwan Semiconductor Manufacturing and United Microelectronics, the world's two largest chipmakers.

With the collaboration of investment banks, the Taiwan Stock Exchange has also held a number of events around the world in an attempt to drum up interest. One boost to the Exchange's reputation has been the listing of US-based integrated circuit designer Integrated Logic Memory on the main board, making it the only foreign company to have a primary listing in Taiwan. With the cross trait regulatory passed, China-based TPK Holdings, a touch panel provider, has also gone through the preliminary review and is waiting for a primary listing on the main board.

Baker & McKenzie has retained its status as one of Taiwan's powerhouse law firms due to its "strong level of knowledge, expertise, and innovation", says a client. "The firm's quality services associated it to stand out in the market," adds the client.

The team has had another busy year handling some of the biggest and most complex transactions in the banking, capital markets and M&A areas. The firm "has good performances because of their legal counsels" and "their legal expertise for specific cases are special", comments a client.

One example saw the banking team assist the Taiwan Cooperative Bank and a group of lenders in relation to a $262 million loan granted to the Export-Import Bank of Korea (KEIM Bank). This is the first transaction by KEIM Bank to raise funds in the loan market in Taiwan.

Another highlight involved the capital markets team acting for Comestibles Master in relation to its Cayman entity Gourmet Master's application for an IPO on the Taiwan Stock Exchange. Another sign of the exchange's growing reputation among foreign listers, the transaction was valued at NT$48 billion ($1.65 billion).

"The firm has strong and in-depth worldwide capabilities which have helped us to successfully process and completed international deals," says another client.

In the M&A area the team assisted AIG in its sale of its Taiwan subsidiary Nan Shan Life Insurance (Nan Shan) for $2.16 billion. The deal is part of AIG's effort to raise funds to exit government ownership after receiving the largest US bailout during the financial crisis. This transaction came shortly after the original attempted sale by AIG had been rejected by the Taiwan regulator.

At the time of sale, Nan Shan had NT$1.78 trillion in assets, making it Taiwan's second-largest life insurer by assets behind Cathay Life with NT$3 trillion.

The past year saw Chen & Lin advising Wealth Media in the NT$52.4 billion ($1.8 billion) financing for the acquisition of Kbro. This deal is high profile and highly controversial as Kbro is the largest multiple system operator in Taiwan in terms of number of subscribers and it can have an impact on million of audiences.

Another notable highlight was advising ECB Issuance United Microelectronics and their issuance of zero coupon convertible bonds valued at $500 million. Ending the busy year, the team acted for United Microelectronics Corporation (UMC) in their plans to purchase certain shares valuing at $87 million of the holding company of HeJian Technology (SuZhou) (HeJian).

Formosa Transnational M&A team has "built a strong reputation in advising cross border M&A transactions", says a client. The team has an "array of outstanding practitioners, notably Delphine Chen", adds a rival partner. Chen is also noted by clients for her "ability to work with both international and local corporate". Another client says she is a "very knowledgeable and commercially savvy practitioner" who can be "relied on to produce top-quality results".

M&A is a major focus for the firm and highlights in the past twelve months include advising a leading US high-tech company on an acquisition of a company valuing $26 million and advising a leading Japanese company on merger control issues.

Formosan Brothers continues to expand on its "base of foreign clients" and had another busy year working on several significant acquisitions. The team's M&A practice continues to grow especially for cross-border transactions and "work with international law firms has been highly recognised", comments a rival partner.

The team represented a client to purchase all shares of a target company in Taiwan, which became the client's subsidiary. This deal involves the shares transfer and purchase of assets located in China, Germany and the US and is also related to the allocation and license of varies intellectual property right.

Other M&A transactions include representing a domestic company to sell significant shares to a Japanese automobile manufacture with option for further purchase.

The restructuring and insolvency team's senior partners meanwhile were appointed by the court as the administrators in several large bankruptcy proceedings in Taiwan. Chih-Poung Liou was appointed as the bankruptcy administrator for a domestic publicly traded electronic company by the Taipei District Court.

The team also represented a client to seek recovery from an investment advisor founded in US, which is currently under receivership. The case involves the fraudulent offer and sale of securities.

One of Jones Day's biggest selling points in Taiwan is its international network: "One of the firm's strengths is their ability to call in assistance from a number of foreign countries due to the many Jones Day offices around the world," says one client.

However the firm can also call upon a strong local practice. Managing partner Jack JT Huang "sets milestones in M&A deals," according to one peer. As one of the best M&A lawyers in Taiwan, according to clients, Huang is referred to by peers as the "dean of M&A".

Clients also gave special praise for Louis Liu and Tommy Chen because "they are knowledgeable with great communication skills" and because "they are able to provide commentary on a variety of legal matters".

One deal highlight last year saw the team advice TSRC in its $168 million acquisition of Dexco Polymers, a joint venture between Dow Chemical and ExxonMobil Chemical.

In March 2011 the firm led by star partner Chung-Ping Liu represented Tatung Company in connection with its $ 150 million proposed offering of European convertible bonds.

Another high profile role saw firm engaged by parties for Tawian aspects of the Lehman Brothers Holdings liquidation. Due to the bankruptcy of the Lehman Brothers there is still a large amount of anticipated litigation, insolvency, commercial and real estate related issues that need resolving.

LCS & Partners clear strength according to peers and client is its strength in corporate work. "They are experts in M&A deals," says a client. "Armed with a good knowledge, the firm is strong in their specialised areas, such as M&A and capital market."

The firm is also commended for its ability to support clients throughout South-East Asia, "LCS has no problem in supporting a deal when the issues involve Japan, China and offshore matters," says another client.

Highlighting the firm's strength last year was its advice on the acquisition of Chinese assets of Jean Co by the BOE Group in a first cross straits M&A deal in Taiwanese History. This landmark deal was complicated by the separate regulatory approvals required in both China and Taiwan.

The firm has also advised on the largest foreign company IPO in Taiwan acting for TPK Holding on its NT$2.24 billion listing.

Clients have enjoyed working with the firm because "throughout the transaction, they are dedicated and responsive" and have individuals like Rich Lin "who have demonstrated their ability in finding solutions".

Other significant M&A work included advising DSM in its tender offer for control of AGI, a Taiwan listed company. This is the first significant tender offer for a Taiwan listed enterprise by a major international company since the global financial crisis.

Lee & Li "is without a doubt the biggest and strongest law firm in Taiwan", says a client. "Lee & Li has the right balance between innovation and conservatism." The firm's depth of knowledge and lawyer capacity is also appreciated by clients: "Lee & Li is quite knowledgeable at the different levels from partners down to junior lawyers," says one.

The firm consists some of the most highly regarded practitioners in Taiwan: Abe Sung. Sung is "very good commercially. very solution oriented" and "very knowledgeable with banking aspects", according to one client. Robin Chang is also recommended by peers.

Other outstanding practitioners include Sherry Lin, "a very talented practitioner" renowned for "her problem-solving ways for both public and private to make projects successful" according to a client, and Wong Pao Ling in the project finance team: "She is very experienced in government-related legal issues and quite familiar with public/private partnership", says another. "[Ling] thinks very proactively to try and solve issues under all legal constraints".

Last year a clear highlight saw the team advise eight prestigious Taiwanese financial institutions on the refinancing of two syndicated loans to Taiwan High Speed Rail. In this transaction, the Bank of Taiwan acted as the facility agent for the NT$382 billion ($13 billion) syndicated loan, marking it the largest syndicated loan in the history of Taiwan.

Taiwan's high speed rail project is itself one of the world largest BOT (build-operate-transfer) projects and the firm had to tackle various contract issues between Taiwan High Speed Rail and the government authority as part of the refinancing process.

The capital markets team meanwhile advised Hon Hai Precision Industry, one of the world's largest manufacturers of electronic components, on the offering of convertible bonds on the Singapore Exchange Securities. The $1billion zero coupon convertible bonds due 2013 had Credit Suisse and Standard Chartered acting as the book-runners.

Another notable highlight for the M&A team advising MBK Partners in an agreement with Wang Chung Broadband Media to sell the shares of China Network Systems and 11 cable system operators in Taiwan for a cash consideration of $2.4 billion.

Lexcel Partners, "I give the highest recommendation in terms of its knowledge, expertise and innovation", says a client. Although not as deeply resourced as other larger law firms, "the team still have extensive experience in financial industry" and "have capable teams to deal with cross border related joint venture, merger and acquisition and other projects", comments another client.

A notable highlight for the firm was advising MBK Public Company in transferring the whole ownership in Gala TV to EQT at consideration of $193 million by common share transfer and special share redemption.

Russin & Vecchi retains its standing as one of Taiwan's powerhouses in banking and finance law market. Thomas McGowan, "well known in Taiwan's banking circles for his advisory in acting for issuers and investment banks, derivatives, investment products and structured products, and corporate work", leads the team.

The team boosted its manpower last year hiring Echo Hu from Lexcel Partners. "Echo Hsu, an established and well-regarded capital markets practitioner, is a great addition for any team," says one peer.

The team is particularly strong in derivatives and securities services' and clients appreciate the firm's international banking links: "The team's analysis on foreign banks is usually easier to be accepted by our colleagues," says one.

A highlight in the past twelve months was advising AU Optronics on an $800 million Rule144A/Reg S offering. The transaction also involved Goldman Sachs International, UBS Hong Kong Branch, Citigroup Global Markets, Merrill Lynch Far East and Standard Chartered Bank Singapore Branch.

Tsar & Tsai "has a very strong restructuring and insolvency practice" and its "advice is very practical", comments a client. "The firm has built a solid reputation at working with global companies and ultimately is able to solve the problem and to understand the issues," says another.

Partner C Y Huang is noted for his "expertise in the corporate insurance sector" and his "twenty eight years of experience in corporate representing clients from Taiwan and overseas".

Another highly regarded lawyer is Jackie Lin: "renowned for her banking and finance expertise, which is complemented by her involvement in corporate finance, debt restructuring, bank negotiation, capital markets and M&A matters", according to one client. "Jackie and her team are creative, deeply conscientious, professional and hard-working."

Last year the firm acted for BofA Merrill Lynch as its Taiwan legal counsel in assisting SemiLEDs' $172.5 million listing application to the US Securities and Exchange Commission, including preparation of due diligence report and reviewing the registration statement from Taiwan law perspective.

The banking team also successfully assisted China Network Systems (CNS) to conclude the NT$31.35 billion ($1 billion) syndicated loan agreement with the syndicate banks and assist CNS to successfully drawdown the loan.

Concluding a strong year for the firm, the M&A team successfully assisted On Semiconductor (OSC) to acquire the semiconductor business of Sanyo for approximately $366 million.