CGN, China Shenhua Slide as Parents Say They Aren’t in Talksby
Both companies say they haven’t worked together on merger
China’s top coal miner said to submit proposal to regulators
Bloomberg News reported Thursday that coal miner Shenhua Group Corp. had submitted a proposal to government regulators about a possible tie-up with China General Nuclear Power Corp. In separate statements Thursday, both companies said they have not worked with each other on a merger and haven’t received information from any government departments about a combination with the other company.
CGN Power dropped 5.4 percent to HK$2.26 at the close in Hong Kong. China Shenhua Energy lost 2 percent to HK$14.44 on Friday. The benchmark Hang Seng Index slipped 0.2 percent.
Chinese authorities are still considering Shenhua Group’s proposal, and there’s no certainty it will result in a tie-up, people with knowledge of the situation said, asking not to be identified as the information is private. In March, Shenhua Group’s general manager, Ling Wen, said the company was considering entering the nuclear power business, while Chairman Zhang Yuzhuo said it was in talks with nuclear developers including China General Nuclear and China National Nuclear Corp. about strategic cooperation.
A deal would combine China’s largest coal miner with its biggest nuclear power producer, 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, according to the people.
The State-owned Assets Supervision and Administration Commission didn’t reply to faxed questions. A Beijing-based spokesman for ChinaCoal said the company hasn’t heard anything about combining with Shenhua Group and declined to comment further.