A new Chinese firm is set to become the world’s largest power company, after the State Council approved the merger between Shenhua Group and China Guodian on Monday.
The new company, called China Energy Investment Corp, will have 1.8 trillion yuan (US$271 billion) in combined assets, with an installed capacity of close to 226 gigawatts, according to a report by China Securities Journal.
Shenhua Group, the country’s top coal producer, will become the parent of China Energy. China Guodian is one of China’s five leading power companies. The merger is set to bring about more “efficiency” of the resources of the two companies, the report said.
The move is part of China’s overall plan to restructure state-owned enterprises (SOEs) such as Shenhua and China Guodian. The number of SOEs under the purview of the central government has already decreased from 196 in 2003 to 98 currently, the National Business Daily said.