(Adds industrial bureau & analyst comment)
By Michael Gold
TAIPEI May 14 Taiwan's National Development
Fund said on Tuesday it has agreed to spend T$20 billion ($666
million) to encourage companies of strategic importance to the
economy to merge.
A spokesman for Taiwan's Industrial Development Bureau said
that the fund will be targetted at companies with long-term
development potential and that will most likely benefit the
island's overall economic growth.
He did not mention any specific companies, but said firms
involved in green energy development, manufacturing and other
technical fields would likely fall under the definition.
He did not give an exact definition of "strategic," but said
that companies in fields such as national defence have not as
yet been considered for inclusion in the plan.
Andrew Tsai, a Taipei-based economist at KGI Securities,
said he would expect the government to encourage mergers among
companies at different ends of the manufacturing chain in the
same industry, such as solar energy, which has faced
overcapacity in recent years.
"It would make sense for them to encourage this kind of
upstream-downstream cooperation among companies that complement
each other," Tsai said.
He mentioned solar firms Sino-American Silicon Products Inc
and Solartech Energy Corp as two possible
A spokesman for Sino-American said the company is
considering cooperation possibilities but would not comment on
specific merger targets, and did not have any comment on the
government's new plan.
Representatives for Solartech could not be reached.
The Taiwan government's investment promotion website said
the Fund's key priorities historically "focused on industries
such as petrochemicals and semiconductors to promote Taiwan's
economic development plans. Recent investment has focused on 10
emerging industries, including information, telecommunication,
aerospace and biotechnology."
(Additional reporting by Faith Hung and Jeanny Kao; Editing by