China Creates Power Behemoth With Shenhua, Guodian Merger

The government of President Xi Jinping approved the merger of Shenhua Group Corp., the country‘s top coal miner, with China Guodian Corp., one of the its largest power generators, the State-owned Assets Supervision and Administration Commission said in a one-sentence statement posted online Monday. The new entity, with assets of 1.8 trillion yuan ($271 billion), will be the world‘s second-biggest company by revenue and largest power company by installed capacity, according to Bloomberg New Energy Finance.

The Shenhua-Guodian tie-up may be the first of a handful of mergers in China‘s power industry as top policy makers try to cut industrial overcapacity and the number of state-owned enterprises, as well as the country‘s reliance on coal power. Monday‘s announcement concludes months of speculation about the merger, which was first reported by Bloomberg in June.