China Resources Utility Units Combine in Shift From Coal

Posted by Robyn, May 18, 2013

chinagasState-owned China Resources (836) (Holdings) Co. plans to combine two of its Hong Kong-traded subsidiaries amid a shift from coal-fired power, sending shares in its electricity generation unit down as much as 11 percent.

China Resources Power Holdings Co., an electricity generator, will offer HK$24.64 a share for all the shares of China Resources Gas Group Ltd. (1193), a natural gas distributor, both companies said in a joint statement to Hong Kong’s stock exchange today. There will be no cash alternative for the deal, which values China Resources Gas at HK$54.8 billion ($7.1 billion). The offer represents a 13 percent premium to China Resources Gas’s closing share price May 3, its last day of trade before both stocks were suspended.

The integration of the two units comes amid pressure in China to reduce pollution by shifting to cleaner fuels such as natural gas. Shares of China Resources Power, which largely uses coal for electricity generation, fell the most since November 2008 percent in morning trading in Hong Kong.

via China Resources Utility Units Combine in Shift From Coal – Bloomberg.