China’s Datang, Huadian await final merger approval
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