Will "Natural Gas" be the single largest?

Since February, the joint acquisition of China Gas by Xinao Energy and Sinopec has been buzzing. Here, Xinao Energy is full of confidence and takes the initiative. On the other side, China Gas has a very clear attitude and does not accept the offer. In the face of both sides of the tug of war you come and go, the netizens of the “watching war” side are concerned: can mergers and acquisitions become a reality? If the merger and acquisition are successful, will there be giants in the civilian gas sector and will natural gas prices “rise”?

China Gas "does not approve acquisition"

According to a survey conducted by the “China Net Affairs” reporter, on December 13, 2011, both New Energy (H shares) and Sinopec (H shares) issued an announcement of acquisition and proposed to initiate a tender offer to China Gas at a price of HK$3.5 per share. The amount involved was as high as HK$16.7 billion. Among them, the new Austrian energy through the ** and its own funds to pay 55%, Sinopec paid 45%.

After suffering a series of ups and downs in the acquisition of Chinese gas, which has attracted much attention from netizens, it is currently in a stalemate. Some people think that once the acquisition is successful, the competition pattern in the mainland gas market will undergo a major change. Xinao Energy will have a franchise of nearly 80 cities above prefecture level, far exceeding other gas operators and becoming a domestic city gas distributor. overlord. Sinopec, through this acquisition, can realize the integration of natural gas upstream and downstream, expand the end-consumer market, and gain more terminal discourse power.

On February 13, a person close to China Gas reported in an interview with Xinhua News Agency’s “China Network Affairs” reporter that since China New Energy and Sinopec made a tender offer, Chinese gas executives considered the acquisition to be a “hostile takeover.” China Gas rejected the offer offered by the other party and commissioned Australia’s Macquarie Group as a financial advisor to boycott the acquisition. This means that China Gas does not approve the acquisition at all and does not accept the offer.

Will M & A lead to monopoly?

In recent years, China’s natural gas production and natural gas consumption have grown rapidly, and even in some years in some years, “gas shortages” have appeared. It is in this context that the Chinese gas acquisition war has caused netizens to pay so much attention.

It is understood that the major pipeline natural gas operators in China currently include China Gas, Xinao Energy, China Gas, China Resources Gas, Kunlun Gas, Huatong Energy, Shaanxi Natural Gas, Shenzhen Gas, and Beijing Gas. A Chinese gas person who declined to be identified said in an interview with a reporter from China Net Affairs that China Gas has a franchise of pipeline gas in more than 40 cities and there are more than 30 Xin'ao energy companies, including China Gas, China Resources Gas, and PetroChina. There are more than 20 groups (including Kunlun Gas). Several cross-regional gas operators are basically in equilibrium. If Xinao and China Combustion merge, they will have nearly 80 franchise rights for cities above prefecture level, accounting for about 30% of the national market, far more than other gas operators. Once the gas market share in an area is over-concentrated, operators that have a majority of market share in the region can manipulate multiple gas companies to increase the cost of production of their books, making it easier to increase prices.

However, some experts do not agree with this view. Han Xiaoping, chief information officer and energy expert of China Energy Network, believes that even if the acquisition is successful, it will not be considered a “monopoly”. The domestic natural gas companies are not only China Gas, but also CNOOC and other central enterprises. In addition, gas prices are regulated by the government, and the acquisition of China Gas will not affect domestic gas prices.

Experts believe that domestic gas price reform can draw lessons from the experiences of countries such as Britain and the United States. From the mid-1980s onwards, the United States began to cancel the wellhead price control of natural gas, and gradually opened up the "two" (natural gas wellhead and terminal delivery price), and control the "intermediary" (interstate pipeline transportation costs) situation. At present, there are dozens of large natural gas producers in the United States, and thousands of smaller gas producers. China's natural gas price reforms can constantly improve the corresponding price and regulatory system, so that natural gas pricing and price supervision can be followed. Based on this, the role of the government focuses on contract approval, maintenance of consumer rights, anti-monopoly and other aspects.