Only 12 days! China Shenhua's hundred-billion-level acquisition quickly approved

On February 12, China Shenhua Energy Company Limited (referred to as “China Shenhua”) received registration approval from the China Securities Regulatory Commission (CSRC) for its transaction to acquire a 100% stake in 12 core enterprises under the controlling shareholder, China Energy Group, valued at 133.598 billion yuan.

It is worth noting that this transaction is the first restructuring project in A-shares to apply the simplified review process for mergers and acquisitions; in terms of scale, it is the largest issuance of shares for asset purchase in A-shares.

According to CITIC Securities, as the first M&A restructuring project in A-shares to utilize the simplified review process, the project was officially accepted by the Shanghai Stock Exchange two working days after the submission of application documents, approved within five working days, and registered with the CSRC within five days. The “2+5+5” simplified process ensures efficient review and precise service for national strategies, and is an effective reflection of the deepening reform of the capital market, support for the real economy, regulatory guidance towards good market behavior, and the release of vitality through institutional innovation. The implementation of this first simplified process marks a more refined and market-oriented step in serving the high-quality development of the real economy.

133.598 Billion Yuan to Acquire 12 Targets

Regarding the specific transaction plan, this deal involves 12 target companies, with the overall issuance of shares and cash payment ratios at 30% and 70%, respectively.

Specifically, China Shenhua plans to purchase, through issuing A-shares and cash payments, the 100% equity of Guoyuan Power, Xinjiang Energy, Chemical Company, Wuhai Energy, Pingzhuang Coal Industry, Shenyan Coal, Jinshen Energy, Baotou Mining, Shipping Company, Coal Transportation and Sales Company, and Port Company held by China Energy Group, as well as acquire 100% equity of Inner Mongolia Construction Investment held by Western Energy through cash payment.

Regarding payment methods, the company’s cash consideration for this acquisition is approximately 93.519 billion yuan, with the remaining paid through share issuance at a price of 29.40 yuan per share.

For supporting fund raising, the total amount of funds raised will not exceed 20 billion yuan, all of which will be used to pay the cash consideration for this restructuring, intermediary agency fees, and related taxes.

China Shenhua stated that by injecting multiple core high-quality assets in one go, the overlap in business areas such as coal, pithead coal power, coal chemicals, and logistics between China Shenhua and its controlling shareholder will be substantially resolved. The company’s asset scale and profitability will be further enhanced.

Leapfrog Growth in Resource Reserves and Capacity

According to China Energy Group, after the completion of this restructuring, China Shenhua’s business scale will further expand, with resource reserves and capacity achieving a leap forward: coal reserves will increase to 68.49 billion tons, recoverable coal reserves to 34.5 billion tons, annual production capacity to 512 million tons, power generation installed capacity to 60.88 million kilowatts, polyethylene capacity to grow by 213%, and total assets will increase by over 200 billion yuan.

The new capacity is mainly distributed in strategic resource areas such as Xinjiang and Inner Mongolia, forming an east-west coordinated, multi-regional capacity system with China Shenhua’s existing layout. Several pithead power plants are directly connected to supporting coal mines via belts or short-distance railways, minimizing logistics losses and better responding to regional and seasonal supply-demand fluctuations. This enhances emergency response and supply stability during peak summer and winter heating periods, creating strategic advantages unmatched by single mine operations.

From an industrial integration perspective, this restructuring consolidates dispersed resources into a single enterprise, further aggregating high-quality assets. Through unified optimization and allocation, it reduces redundant investments, coordinates technological innovation, product development, and production, accelerates innovation breakthroughs, injects new momentum for high-quality development, and enhances risk prevention and cycle resistance.

From an industry transformation perspective, under the dual demands of energy transition and safety, the restructured coal extraction entities will provide more stable supply, while pithead coal power and coal chemical platforms will improve clean conversion levels. The autonomous control of transportation and logistics networks will be strengthened, and cross-regional capacity coordination can promote the coal industry’s transition toward greener and smarter development.

After the restructuring, standing at a new starting point, China Shenhua will leverage a more complete industrial chain, clearer strategic layout, and stronger development momentum to explore a practical path for traditional fossil energy companies that balances supply security, clean and efficient energy, and the coexistence of scale advantages and value creation.

(Source: Shanghai Securities News)