(Yicai Global) Feb. 1 -- The State Council has approved the restructuring of two leading Chinese nuclear power companies, China National Nuclear Corp. and China Nuclear Engineering and Construction Group Corp.
CNNC will take over the Beijing-based firm, which will be transferred to the former without compensation, the State-owned Assets Supervision and Administration Commission said yesterday.
The SASAC will no longer oversee China Nuclear Engineering and Construction Group once it is transferred, and the number of major state-owned enterprises under SASAC's direct supervision will drop to 97.
The two nuclear energy groups were previously affiliated to China National Nuclear Industry Inc., which restructured in 1999.
CNNC owns three listed companies and China Nuclear Engineering and Construction Group has one. The two companies made their merger plan public in March last year.
Insiders had previously said that the merger was not likely to encounter many obstacles as the groups are highly complementary as one is an upstream business and the other is a downstream one.
The Chinese government started to plan mergers between central SOEs as early as the 1990s, aiming to solve ubiquitous resource waste problems. China had 196 such groups when the SASAC was founded in 2003. The country plans to cut that number to less than 90.
Restructuring central SOEs is one of the SASAC's priorities this year, and the scope of the reorganizations will extend to the equipment manufacturing, coal, electrical power, communications and chemical industries, insiders said.