Citicorp and Traveler's Group's application for approval of their combination
Chinese Taipei
Case:
Citicorp and Traveler's Group's application for approval of their combination
Key Words:
group, offshore combination
Reference:
Fair Trade Commission Decision of July 8, 1998 (348th Commission Meeting); Decision Ref. (87) K'ung Chieh Tzu No. 6513
Industry:
Foreign Banking Industry (6513)
Relevant Laws:
Articles 6(1)(v), 11(1)(iii), and 12 of the Fair Trade Law
Summary:
Citicorp (applicant) applied for approval of its offshore combination with Traveler's Group. The company name after combination would be Citigroup Inc. The combination would change the relationship between certain offshore companies and their subsidiaries or branches in Chinese Taipei. Because the sales of the applicant's subsidiary (branch) in this Economy (i.e. Citibank Co., Ltd., Chinese Taipei Branch) for the preceding fiscal year reached NT$2 billion, an application for approval of the combination is required to be filed with the Fair Trade Commission (FTC) in accordance with Article 11 of the Fair Trade Law (FTL).
Services undertaken by the applicant's affiliates in this Economy mainly include banking, credit card services (Citibank Co., Ltd., Chinese Tapei Branch and Taiwan Diner's Club International Inc.), consulting services (the Chinese Taipei Branch of Hong Kong-based Citibank Financial Consulting Co., Ltd., Citicorp Securities Investment Consulting Company), insurance agency (Citicorp Insurance Agency Co., Ltd., Citicorp Property Insurance Agency Co., Ltd.), and securities and futures trading (Citicorp Securities (Chinese Taipei), Ltd., Citicorp Capital Asia (Chinese Taipei), Ltd.). Services undertaken by the Traveler's Group's affiliates in this country include securities and futures trading (Solomon Smith Barney Securities Ltd.) and consulting services (Solomon Smith Barney Investment Consultants Ltd., and Solomon Smith Barney Ltd). The services undertaken by the two participating enterprises in this Economy overlap in the markets of securities and futures trading and consulting services. Their combined market shares in the overlapped services as a result of the combination would remain low, and the market shares in the other services which the two do not overlap, would remain unchanged after the combination. Therefore, the combination would not restrict competition.
After consultations with economy and finance-related government agencies, the FTC considered that the combination would not violate the financial policy and relevant laws and regulations of this country. The combination is of international financial services. After the combination, Citigroup Inc. would control the business operations of the applicant's and the Traveler's Group's affiliates. Citigroup Inc. would be one of the world's leading financial service institutions, providing complete consumer and corporate financial services including conventional saving and loan services, credit card services, asset management services and insurance services. Local consumers and businesses would benefit from the variety of financial products provided by all of the affiliates controlled by Citigroup Inc. Since the benefits of the combination outweighed its disadvantages, the application was approved in accordance with FTL Article 12.
Author: Chang Hsiang-hsin
Section Chief: Hu Kuang-yu