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China: Energy giant merger moves closer

By  |  August 6, 2017

Shenhua and China Guodian have reached a basic agreement to merge, part of a push by the Chinese government to promote consolidation in the energy industry. A Guodian executive confirmed during an energy conference that China Guodian and Shenhua Group had applied to China’s State Council for merger approval reports the Financial Times.

The government, looking to keep prices on an even keel, has taken pains to bring stability to the power market. Beijing has urged coal suppliers to sign long-term contracts with power companies and quietly encouraged Shenhua and Guodian to merge. Trading of the pair’s listed subsidiaries was suspended in June.

The combined entity’s assets of 1.8 trillion yuan (US$267 billion) likely would help Shenhua secure funds to acquire coal mining rights abroad.>

Full Content: Financial Times

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