The long-debated merger between the China Nuclear Engineering Corp (CNEC) and the China National Nuclear Corp (CNNC) could be implemented by two possible models:
- one party becomes the up/downstream business partner of the another one, following the example of the China Power Investment Corporation (CPI) and the State Nuclear Power Technology Corporation (SNPTC), which merged as the State Power Investment Corporation (SPIC);
- a homogenized re-organization, which means that both companies still exist as the same level even if they are incorporated.
Currently, the CNEC and the CNNC are considering re-organizing the structure, but there has no specific proposals being released.
Will CNEC and CNNC remain a business partnership or become affiliated relations?
In the view of the business features of both companies, the CNEC and the CNNC are members in a supply chain of the upstream and downstream industry. It is much more feasible that their combination will follow the model of the “SPIC”, which means that CNEC could probably become the civil engineering and installation party under the “new CNNC”. And it is also possible that the CNPE will be incorporated into the CNEC to be a complete engineering general contracting entity.
The re-organization of CNEC and CNNC is just a comprehensive adjustment in Chinese nuclear market and it belongs to the re-structuring of the industry up/downstream, so it will not, in a short term, bring too much changes in the domestic and overseas nuclear power industry.
