According to the announcements separately released by the listed subsidiaries of the CHN Energy and the China Guodian Corporation late Monday, the two centrally-administered state-owned energy giants entered into a merger agreement on Monday.
Upon the completion of the merger which still needs to go through the necessary formalities and requires approval by the relevant authority, the China Guodian Corporation will become a part of CHN Energy while the latter will become the country’s largest coal and electric power enterprise in terms of assets.
Also, the merger between CHN Energy, one of China’s major electric power providers, and the China Guodian Corporation, the country’s largest coal producer is believed to be aimed at easing the increasing tension between China’s coal industry and its electric power industry.
The conflict between the two industries has been intensified in recent years as a result of the constant surge in the coal prices, which has led to a big turnaround in coal companies’ business performances while causing great losses to the country’s electric power enterprises.
According to the preliminary financial report of China Shenhua, a listed subsidiary of CHN Energy, the company’s net profit jumped by nearly 99 percent from a year earlier to reach around 45.2 billion yuan in 2017. By contrast, GD Power Development, one of the China Guodian Corporation’s listed subsidiaries, is expected to suffer a decline of over 60 percent in its net profit growth last year.
The China Guodian Corporation expects the merger to strengthen its coordination with its upstream industry and complement each other with their own advantages, so as to minimize the impact of the changes to the coal prices on its business performance.
In addition, the merger is the latest in a series of mega-mergers in China’s energy industry, including the combination of the country’s two major nuclear plant developers just a week earlier.
Upon the completion of the merger which still needs to go through the necessary formalities and requires approval by the relevant authority, the China Guodian Corporation will become a part of CHN Energy while the latter will become the country’s largest coal and electric power enterprise in terms of assets.
Also, the merger between CHN Energy, one of China’s major electric power providers, and the China Guodian Corporation, the country’s largest coal producer is believed to be aimed at easing the increasing tension between China’s coal industry and its electric power industry.
The conflict between the two industries has been intensified in recent years as a result of the constant surge in the coal prices, which has led to a big turnaround in coal companies’ business performances while causing great losses to the country’s electric power enterprises.
According to the preliminary financial report of China Shenhua, a listed subsidiary of CHN Energy, the company’s net profit jumped by nearly 99 percent from a year earlier to reach around 45.2 billion yuan in 2017. By contrast, GD Power Development, one of the China Guodian Corporation’s listed subsidiaries, is expected to suffer a decline of over 60 percent in its net profit growth last year.
The China Guodian Corporation expects the merger to strengthen its coordination with its upstream industry and complement each other with their own advantages, so as to minimize the impact of the changes to the coal prices on its business performance.
In addition, the merger is the latest in a series of mega-mergers in China’s energy industry, including the combination of the country’s two major nuclear plant developers just a week earlier.
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