Beijing approves the merger of two state-owned nuclear giants
China’s state asset regulator has been driving consolidation of businesses it supervises to help the economy grow at a slower but more sustainable pace
Beijing has given the green light to the merger between two nuclear giants as it continues to pursue further consolidation of state-owned industrial juggernauts to enhance operating efficiency.
China National Nuclear Corp (CNNC), the mainland’s second-largest nuclear power plant developer, and China Nuclear Engineering & Construction Corp (CNEC), the country’s only nuclear power engineering and construction firm, received the go-ahead to integrate their businesses 10 months after the merger proposal was made public, according to the China State-Owned Assets Supervision and Administration Commission (SASAC).
After the transaction, CNEC will be operating under CNNC, which removes it from SASAC’s direct supervision, the state-asset regulator said in a statement.
The merger will create a new nuclear powerhouse with assets worth more than 620 billion yuan (US$99 billion) and 150,000 employees, according to Reuters’ calculations based on data from the companies’ websites and public statements.
The state-asset watchdog has been seeking to drastically consolidate businesses under its direct oversight to drive efficiency gains amid the transition of the Chinese economy into a new growth pattern where the pace is expected to be slower but more sustainable.
“The consolidation helps CNNC to form a complete industry chain of nuclear power, which encompasses engineering design, construction and research,” China Securities said in a research note.
“CNNC will further diversify its businesses after the consolidation.”