;In 1997, the global financial crisis and afterwards, the European debt crisis, the international economic uncertainty factor increased, most of financial institutions (financial holding companies, banking, securities, etc.) are all facing great challenges. Also, by more and more increasing trades with China and opening gradually the financial policies with China, the financial cooperations with each other have kicked off in real terms since ECFA signed in 2009. Since our government announced in December 2001 the implementation of the Financial Holding Company Law, by the end of 2015, there were totally 16 domestic financial holding companies - the total combined assets amounted to 45.5 trillion, and the total consolidated shareholders equity amounted to 3.1 trillion, occupying a core and dominant position in the financial industry of Taiwan .
After the failure of the second financial reform, the merger and acquisition activities of domestic financial holding companies have become fewer and fewer for a period of time. In the recent years, due to facing not only domestic but foreign competitions, there’s no way but actively seeking acquisition opportunities to increase domestic market share and enhance international competitions.
This study focused on the Merger and Acquisition of China Development Financial Holding Company and Cosmos Bank recently in view of the understanding of the consolidation process, and analyzing the M&A effect by measuring five indexes - capital adequacy, asset quality, management abilities, profitability, and liquidity.