China’s Datang, Hua­dian await fi­nal merger ap­proval

The Star Malaysia - StarBiz - - Foreign News -

HONG KONG: State-run China Datang Corp and China Hua­dian Corp are in talks to merge and await­ing fi­nal gov­ern­ment ap­proval for a deal that would cre­ate the world’s big­gest power gen­er­a­tor by ca­pac­ity, ac­cord­ing to sources.

The two elec­tric­ity pro­duc­ers have reached agree­ment on most tech­ni­cal is­sues for a deal, said the sources, who asked not to be iden­ti­fied be­cause the in­for­ma­tion isn’t pub­lic.

They are now wait­ing for ap­proval by China’s State Coun­cil, which may or may not au­tho­rise the com­bi­na­tion, said the sources.

Pres­i­dent Xi Jin­ping has pledged to shake up the coun­try’s sta­te­owned en­ter­prises as part of the gov­ern­ment’s so-called sup­ply-side re­forms to elim­i­nate ex­cess ca­pac­ity.

Reg­u­la­tors are also seek­ing to lower the coun­try’s re­liance on coal and ex­pand the use of re­new­ables and nat­u­ral gas.

Hua­dian hasn’t heard about such a merger or re­ceived no­tice from the gov­ern­ment on the mat­ter, a Bei­jing-based spokesman said by phone.

Datang didn’t re­ply to a fax seek­ing com­ment and the com­pany’s Bei­jing-based spokesman wasn’t reach­able by phone.

The Na­tional De­vel­op­ment and Re­form Com­mis­sion and the sta­te­owned As­sets Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion, which are over­seen by the State Coun­cil, didn’t re­spond to faxed ques­tions seek­ing com­ment.

The com­pa­nies have rec­om­mended that a third com­pany, ei­ther a coal group or nu­clear power util­ity, be in­volved in the merger, the sources said.

The Hua­dian-Datang merger could cre­ate a com­pany with to­tal in­stalled ca­pac­ity of about 284 GW, ac­cord­ing to their 2017 an­nual re­ports, top­ping China En­ergy In­vest­ment Corp’s 226 GW as the world’s big­gest gen­er­a­tor.

To­tal com­bined as­sets could reach 1.53 tril­lion yuan (US$221bil), less than China En­ergy’s, which are in ex­cess of 1.8 tril­lion yuan.

The com­bined rev­enue of the two com­pa­nies based on last year’s re­sults equals about 366 bil­lion yuan (US$52.9bil), more than the 313 bil­lion yuan posted by China En­ergy In­vest­ment, ac­cord­ing to Bloomberg data. — Bloomberg

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