Shenhua to merge with Guodian to create China's largest power group

Merged entity to be renamed State Energy Investment Group Co boasting group’s assets of over US$272 billion and power generation of nearly 226 gigawatts.

China’s largest coal miner China Shenhua Energy Co will merge with power giant China Guodian Corp to create the nation’s largest power group, the State-owned Assets Supervision and Administration Commission said today.

The merger has been approved by the State Council and the merged entity will be renamed as the State Energy Investment Group Co after the merger, said Inner Mongolia PingZhuang Energy Resources Co, a listed subsidiary of Guodian, following the asset regulator’s announcement.

The merged group’s assets exceed 1.8 trillion yuan (US$272 billion) and it boasts power generation of nearly 226 gigawatts – making it China’s largest power group.

The merger will allow Shenhua’s coal supply to help Guodian better deal with price fluctuations of raw materials, while Guodian’s wind power business will complement Shenhua’s operations, Huatai Securities said.

Shenhua operates 49 coal mines and has a total generation capacity of 83 GW, while Guodian produced 58.7 million tons of coal last year and has a generation capacity of 143 GW. Guodian has the world's biggest wind power generation capacity of more than 25.8 GW.

Meanwhile, China aims to delay at least 150 GW of coal-fired power projects between 2016 and 2020 and cap coal power generation at 1,100 GW to help reduce carbon emission, the National Development and Reform Commission has jointly announced with 15 other authorities.

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