A Research On Reason, Way And Financial Performance Of Huaneng Power International Inc.'s M&A

With the fast and sustainable development of our national economy, increasing demand for power and the deep reform of electric power system,the 11th Five-Year Plan has brought new development chances for electric power industries.Under guidelines of its general objects which advocate breaking monopoly,introducing competition,improving efficiency and lowering cost, massive M&A Waves have emerged among the electric power enterprises especially the power generation enterprises.The obvious feature of this M&A wave is that more and more power generation enterprises take strategic M&A as a key merger way.Established in 1994,Huaneng Power International Inc.(hereinafter referred to as "HPI") input fine assets mainly through relationship transactions with its controlling shareholder,and it has became the largest list company of isolated power plant whose total generation capacity on equity basis grows from 2,900MW in 1994 to 28,187MW at the end of 2006.HPI has taken over some electric factories and merged with power generation companies in the past 12 years,and succeed in financing in capital market for several times.HPI gains abundant experiences in capital operating,and shows us a representative case that a state-controlled electricity power company who has a fine interaction between parent and subsidiary corporation,and makes a rapid progress through assets restructuring and M&A.Electricity is a special commodity which includes generation,supply, transmission and distribution.There are few successful M&A models in electric power industry,the research object of this thesis is the practice experiences of series M&A of HPI,it anatomizes the reason and way of M&A in HPI based on the analysis of the M&A background of HPI,and analyzes a case that HPI purchase 25%equity from Shenzhen Energy Group Company Ltd.At the end of the thesis,it appraises on M&A performance of HPI,makes a conclusion and provides some suggestions based on the gain and loss of HPI's M&A practice,for the purpose of providing references to promote enterprise development through better M&A for HPI and even the whole power industry,and providing lessons and inspirations for those corporations who are in the midst of M&A wave,expect to improve the success rate and development progress of M&A for electricity power corporation.