Despite high failure rate, M&A remains a dominant strategy for corporations seeking expansion in a mature market, such as Taiwan’s financial market. What’s more, acquirers often pay premiums over targets’ market price for acquisitions. A combination of M&A and real options theories is introduced to better explain management’s rationale behind strategic acquisitions. To highlight the strategic moves without mathematical calculation, this paper adopts a strategic real options approach to analyze a case in point – the Fubon-Taipeibank merger. Using the real options strategy, the acquisition becomes an initial service platform expansion toward Fubon’s vision of becoming a leading regional financial institution in Asia. The exercise of Fubon’s option (buying Taipeibank) solidifies its market position with enhanced capitals and revenues, and serves as an option of follow-up M&As. Real options also inspire the M&A integration process. Three key stages, namely target identification, negotiation, and integration, are taken as options, one leads to another. The purpose is to maximize shareholders’ value by applying real option thinking to demonstrate management flexibility along the M&A process, which cannot be seen by other capital budgeting approaches. / Despite high failure rate, M&A remains a dominant strategy for corporations seeking expansion in a mature market, such as Taiwan’s financial market. What’s more, acquirers often pay premiums over targets’ market price for acquisitions. A combination of M&A and real options theories is introduced to better explain management’s rationale behind strategic acquisitions. To highlight the strategic moves without mathematical calculation, this paper adopts a strategic real options approach to analyze a case in point – the Fubon-Taipeibank merger. Using the real options strategy, the acquisition becomes an initial service platform expansion toward Fubon’s vision of becoming a leading regional financial institution in Asia. The exercise of Fubon’s option (buying Taipeibank) solidifies its market position with enhanced capitals and revenues, and serves as an option of follow-up M&As. Real options also inspire the M&A integration process. Three key stages, namely target identification, negotiation, and integration, are taken as options, one leads to another. The purpose is to maximize shareholders’ value by applying real option thinking to demonstrate management flexibility along the M&A process, which cannot be seen by other capital budgeting approaches.