Two State-Owned Nuclear Companies to Consolidate
(Beijing) — Two of China's largest state-owned nuclear companies plan to merge, joining the consolidation tide that has swept through state-owned enterprises (SOEs) in several sectors.
China National Nuclear Corp. (CNNC) and China Nuclear Engineering & Construction Corp. (CNEC) are working on “strategic recombination plans,” which then need to be approved by the central government. Two listed companies owned by CNNC and another listed by CNEC announced the planned merger over the weekend.
The consolidation will be among the two groups, which will not affect the assets and the trading of the three listed companies, a spokesperson of Shanghai-listed China Nuclear Engineering Corp. Ltd., a subsidiary of CNEC, told Caixin.
Once approved, as expected, it will be another major merger between state-owned enterprises. The merger would follow the landmark naissances of train maker CRRC Corp. Ltd. in 2015, formed by CSR and CNR, and steel giant China Baowu Steel Group in 2016, formerly separately operating as Baosteel Group and Wuhan Iron and Steel Group.
Mergers have taken place in other sectors, including tourism and construction materials. In 2016, five pairs of SOEs started the process. The wave of mergers aims to improve efficiency and boost chances of the merged companies expanding successfully overseas.
Most of the earlier consolidations were among rivals. In contrast, CNNC and CNEC have little overlap in business: CNNC specializes in nuclear power generation and new-energy sources, while CNEC provides construction services for nuclear and national defense projects.
Rumors about the deal have circulated for some time, especially after former CNEC Chairman Wang Shoujun became the chairman of CNNC in December.
The two companies were siblings of an old China National Nuclear Corp., which spun off the construction department to form CNEC in 1999, and reorganized with some administrative bodies to evolve into the new CNNC at the same time.
Wang said at a news conference earlier this month that Chinese nuclear companies should unite if they are to export technology, implying the consolidation.
China currently operates 37 nuclear reactors, which supply 3% of the country’s total power use, and is cooperating with other countries in projects overseas. For example, the Hinkley Point C nuclear power station in southwest England is being built by a Sino-French consortium led by China General Nuclear Power Group and French energy group EDF.
Both CNNC and CNEC have approached Saudi Arabia for collaboration. Last Thursday, CNNC signed agreement to prospect radioactive resources in nine patches in Saudi Arabia in two years. In January 2016, CNEC tied with the Middle East country for high-temperature gas-cooled reactor projects.
Following the nuclear merger, another much-awaited one — between China State Shipbuilding Corp. and China Shipbuilding Industry Corp. — can be expected, as the two firms have different business focuses and were originated from the same company, just like CNNC and CNEC, said Si Jingzhe, analyst with Sinolink Securities.
Contact reporter Coco Feng (email@example.com)
Feb 22 03:07
Feb 21 14:54
Feb 20 17:29
Feb 20 15:19
Feb 20 14:58
Feb 20 12:44
Feb 20 10:56
Feb 20 05:55
Feb 19 17:55
Feb 19 15:55
Feb 19 13:28
Feb 19 10:54
Feb 19 07:33
Feb 18 17:00
- 1Four Deaths in One Family Show Danger of Wuhan’s Home Quarantine Policy
- 2Coronavirus Among Medics More Widespread Than Reported, Research Shows
- 3Coronavirus Tuesday Update: Cabinet Waives Employers’ Welfare Contribution, First Biopsy Study Unveils How Covid-19 Hurts Patients
- 4Coronavirus Friday Update: ‘No Turning Point Yet,’ Politburo Meeting Finds; Cases in Iran ‘Worrisome,’ WHO Says
- 5Coronavirus Monday Update: China Mulls Postponing Annual Meeting of Legislature, WHO-Led Team of Experts Arrives in China
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas