A Study On Mergers And Acquisitions Of Huaneng Power International (600011)

With the sustained and rapid development of Chinese national economy, the demand of electric power continues to grow, as well as deepening the reform of electric system, there has started a large- scale wave of merging and restructuring between electric enterprises, especially between power generation enterprises. The study to analyze the mode, cause, effect of mergers and acquisitions and whether it could create value for shareholders, is of great significance to reveal the current industry-wide experience of operating in the plight of the enterprises, from the analysis we can also forecast the trend of integration from the power industry to coal, transport, and integrated circuit in the future.With qualitative analysis and quantitative analysis methods, the thesis has deeply researched the merger process of Huaneng Power International Co., ltd ( Hereinafter referred to as "Huaneng Power International") since it is established in 1994, combined with free cash flow and the economic value of the law EVA, researching Huaneng Power International on the mergers and acquisitions (M & A) mode, cause and effect, the value of creation, and analyzing the specific acquisition of Huaneng Power International with McKinsey re-introduction of Pentagon systems.The main point of view is: horizontal M & A is one of the most rapid way which is installed in the capacity of electric power enterprises to improve their rights and interests, enhance generating capacity, reduce costs, enhance economic efficiency and upgrade core competencies. At the same time, it can also expand their market share, access to economies of scale and achieve operating synergies; but with rising prices of coal in recent years, the operation of the power generation industry has borne great pressure, the enterprises try to extend from the mainly development of horizontal M & A to vertical M & A and integration of industries ; the electric power industry and upstream and downstream sectors are integrated, and the trend is bound towards the development of integration of coal, transport, and integrated circuit; Huaneng Power International should adjust the industrial structure in time, increase the proportion of renewable energy resources and adopt the circular economy mode of sustainable development of the industry integration, and introduce the present leaders of the coal industry on behalf of the integration project - the circular economy mode of operation of Huaneng Yimin coal companies.