Taiwan Mobile to Acquire Majority Stake in Systex with Up to NT$29.13 Billion, 29.5% Premium

Taiwan Mobile (3045-TW) held a press conference today (12th) to announce a public tender offer for ordinary shares of Systex Information (6214-TW) through its wholly-owned subsidiary, "Taiwan Telecommunications." The goal is to increase its stake by at least 39%, bringing total ownership to a majority, with the maximum acquisition cost reaching NT$29.13 billion. CEO Lin Chih-chen expressed strong confidence in the synergies generated by this acquisition, stating that once majority ownership is secured, both companies' revenues and profits could significantly increase as early as this year.

Lin Chih-chen emphasized that this acquisition aims to deepen the ICT alliance between the two companies in the AI era, integrating information technology (IT) and telecommunications (CT) to create three major synergies: cross-selling, AI, and regionalization. The goal is to double the market share in the IT services sector from 7% to 14%, and further scale Taiwan Mobile's revenue to a NT$100 billion level within four to five years.

The consideration for the acquisition will be split equally between cash and stock. For every one ordinary share of Systex tendered, shareholders will receive 0.84 shares of Taiwan Mobile common stock and NT$92.5 in cash.

Based on the closing prices of both companies today, the implied acquisition price per share is approximately NT$184.5, representing a 29.5% premium. Compared to the average closing price over the past quarter, the premium is about 32.5%, and about 38.5% based on the past six months' average.

Taiwan Mobile stated that the target is to acquire between 39% and 58% of Systex Information's shares, with the total acquisition cost ranging from NT$19.58 billion to NT$29.13 billion. The total share consideration will be between 89,186,829 and 132,636,822 shares of Taiwan Mobile (approximately 2.4% to 3.6% of its total equity), and the total cash consideration will range from NT$9.821 billion to NT$14.606 billion, funded by internal resources and loans from related parties within the Taiwan Mobile group.

Lin Chih-chen mentioned that the public tender offer is expected to begin on August 18 and aims to be completed within 50 days. Approval from the Fair Trade Commission is required, and the acquisition must secure at least 39% of shares. Only after both conditions are met will settlement occur. Once Taiwan Mobile holds a majority stake in Systex, it will be able to recognize profits under the equity method, and if the board is restructured, it may consolidate financial statements—Lin hopes this can happen as early as this year.

Therefore, Lin stated that the short-term priority after securing majority ownership will be the board reshuffle, but he emphasized that the current management team should remain stable post-election. Meanwhile, both teams will form a deep strategic alliance, including exchanging business and product information to maximize synergies.

Regarding the Japanese and Southeast Asian markets, Lin noted that Systex has established SYSTEX Asia as its Southeast Asia operations headquarters in Singapore and has partnered with Itochu Corporation in Japan. After the acquisition is completed, Taiwan Mobile will further collaborate with Systex to advance AI-related business deployments in Southeast Asia and Japan.