Abstract
At the beginning of the establishment of the enterprise, it will inevitably continue to pursue growth to reach the scale of the economy and establish barriers and enhance its market position. When the industry enters the mature or recession period of corporate cycle, or the stagnation of the plateau period, the micro-profit era will come and the profit will no longer grow. The rapid accumulation of the equity in the past has led the management team to face the increasing pressure of ROE (Return on equity) and EPS expectations from shareholders. In recent years, the number of TWSE-listed and OTC-listed companies which implement reduction of capitals has increased day by day. What is the main purpose of these companies' capital reductions? Return cash directly to shareholders for lack of growth, or because of great prospect? In addition to the passive financial operation of capital reduction, this study attempts to find out other ways to overcome the predicament under rapid and tough changes in the industry through the analysis of the merger case of ASE and SPIL in 2018. Since 2015, the case that SPIL was merged by ASE met a lot of problems. With the end of the listing of ASE Holdings Co., Ltd. on April 30, 2018, the final result seems to have a successful conclusion. The legal confrontation and the offense and defense between the companies involved in the merger are indeed an important case in the history of corporate mergers and acquisitions in recent years. By establishing an industry holding company to reduce capital, not only completed industry integration, but also achieved a reduction in capital at the same time. The study shows the capital reduction is unlikely to be effective in enhancing stockholders interests and positive return on market shares without overall considering with M&As . It is a moment’s relief or pleasure which can bring endless suffering to come if capital reduction is implemented as reducing denominator without business growing continually to numerator.