China's Shenhua, CGN may build a $204b power utility giant: Bloomberg

A tie-up is still hazy, but sources say both parties are mulling over it.

Bloomberg reported that Chinese coal producer Shenhua Group Corp. is seeking a merger with state-owned China General Nuclear Power Corp., people with knowledge of the matter said. This will be a deal that would create a utility giant with about $204 billion of assets.

"Shenhua Group submitted a proposal to government regulators about a possible merger, the people said, asking not to be identified as the information is private. Chinese authorities are still considering the proposal, and there’s no certainty it will result in a tie-up, according to the people. CGN Power Co., the main listed arm of China General Nuclear, rose as much as 12 percent in Hong Kong trading Thursday, the most in more than a year, before settling 8.6 percent higher at HK$2.39," Bloomberg said in its report.

Bloomberg added that any deal would combine China’s largest coal producer with its biggest generator of atomic power, giving Shenhua Group the ability to generate energy from cleaner sources as the nation seeks to reduce its dependency on coal and cut carbon emissions. The Chinese government has also considered a merger of Shenhua Group and rival miner China National Coal Group Corp., known as ChinaCoal, the people said.

View the full report here.