The announcement follows after both countries agreed to relax rules on cross-strait financial-sector investment, which outlines the improving trade relations between China and Taiwan.
SPH operates as a financial holding company and listed on the Taiwan Stock Exchange, while BSP is a bank and trades as a wholly-owned subsidiary of SPH.
As per terms of the agreement, the acquirer has agreed to purchase new shares through private placement in line with the applicable regulations of Taiwan.
The transaction can be concluded, when the Taiwanese government amends regulations to increase in shareholding limit by a commercial bank from Mainland China in a single Taiwan financial holding company or bank to 20% or more.
The acquirer will purchase the shares if the shareholding limit is increased, and both parties are free to scrap the deal, in case the regulations are not amended.
Based on the half-yearly report of 2012, the base price for the share subscription will be determined, which is nearly NT$23.5bn ($786m) for SPH and NT$18.7bn ($625m) for BSP.
Completion of the transaction, which has been already approved by the board of directors of ICBC, is conditional and subject to receipt of various relevant regulatory approvals.
The acquisition will enable the Chinese lender to boost capability and quality of its services to customers across the strait and will deepen the financial cooperation across the strait and promote the economic and trade exchanges.
