The China Times Group confirmed the deal in a statement on the front page of its Nov. 5 issue of the China Times.
According to a press release from Want Want China, the investment capital will be provided by the holding company, which is wholly owned by its chairman, Tsai Eng-meng, and his family, rather than from the mainland-based snack maker of the same name. The food manufacturer's management will not be involved in the operation of the China Times Group, whose name is expected to stay unchanged under the buyout deal.
Want Want China also has no plan to retrench the current number of employees and staff, according to the preliminary agreement, and Albert Yu, CTG's chairman, will continue to assist the group as a consultant.
In recent years the China Times Group has undergone restructuring and struggled to recover from its losses. One of the largest media consortiums in the nation, the CTG owns the Chinese-language newspapers China Times, Commercial Times, and China Times Weekly, as well as Chung Tien Television, China Television and related news networks.
Taiwan's printed media suffered tremendously over the last decade due to stiff competition, with nine of the island's newspapers having closed since 1999. The CTG in November 2005 shut down the evening daily China Times Express. Its flagship publication, the 58-year-old China Times, has conducted massive layoffs and revamps since 2001, with the latest one expected to reduce its 1,100-strong workforce by 50 percent, and shut down printing presses in central and southern Taiwan.
CTG executives explained that the island's newspaper market had become extremely competitive, as the number of titles had increased while total advertising revenue declined from US$3 billion in 1999 to US$1.5 billion in 2006. According to the Taiwan Advertisers' Association, the China Times' income from advertising has fallen from US$181 million before 1999 to around US$56 million at present.
The China Times Group stressed in a press release that in view of its mission and responsibility toward society, as well as the worsening financial and operational situation, its board decided to let Tsai's family take over to sustain the group's operation and further development.
The Want Want Group confirmed that the purpose of this deal was to maintain a responsible media and fulfill its social duties, and that the group will continue to work with Yu and the CTG staff to create a better prospect and keep spreading the group's core value and ideas.
Want Want China Holdings Ltd., listed on the Hong Kong Stock Exchange, has also officially applied to issue Taiwan depository receipts this past September, following the government's urging for overseas Taiwanese companies to invest back in the island. It will be the first mainland-based Taiwanese company listed in Hong Kong to make such a move after cross-strait investment restrictions were relaxed July 31.
Tsai said that the funds to be generated by the TDR would be invested in Taiwan, but in non-food industries like the media and financial sectors. Over the past decade, the group has invested US$153.84 million in the island, and promised to continue investment in its home country.
Write to Eric Chao at clchao@mail.gio.gov.tw