UPDATE 1-China Resources to merge gas and power units
HONG KONG May 6 (Reuters) - State-owned conglomerate China Resources (Holdings) Co Ltd plans to merge its Hong Kong-listed power producer with its natural gas distribution unit to form an energy group with a combined market value of nearly $22 billion, the listed firms said on Monday.
Shares in China Resources Gas Group Ltd and China Resources Power Holdings Co Ltd - both more than 63 percent owned by China Resources (Holdings) - were suspended from trading on Monday morning, they said in filings with the Hong Kong stock exchange.
They did not give details.
"There is synergy in the merger. As an enlarged entity, it can help to enhance their competitiveness," said Linus Yip, chief strategist at First Shanghai Securities. "The firms can more effectively manage their resources and increase cost efficiency."
China Resources Gas is one of a number of Chinese natural gas distributors listed in Hong Kong, whose revenue and earnings have been growing rapidly in the past decade on Beijing's efforts to boost gas consumption and cut the use of coal.
Its earnings rose 38 percent year on year to HK$1.65 billion in 2012.
China Resources Power is an independent power producer with total generating capacity of 25,271 megawatts. Its net profit soared 68 percent to HK$7.48 billion in 2012.
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