The stand of Shenhua Group is pictured at the China Mining Congress and Expo in Tianjin, on Oct 20, 2014. [Photo/VCG]

State-owned coal mining and energy company Shenhua Group is currently in merger talks with energy producer China Guodian Corp, as revealed in a report by Bloomberg.

The report revealed, while discussions are in the early stages, there could be a chance the merger may not seal. However, if the two companies decide to consummate the merger, the organization's combined assets could be worth up to 1.82 trillion yuan ($267 billion).

According to the Bloomberg report, the two State-owned giants' Shanghai-listed subsidiaries on Monday started trading halts, and the organization's Hong Kong-listed subsidiaries announced it was notified of the matter.

Before the latest proposed merger between Shenhua and China Guodian, a proposal of reorganizing eight coal-fired and nuclear power enterprises into three giants had been put forward in China's power industry, Bloomberg said. The proposal included Shenhua teaming up with China Datang Corp and China General Nuclear Power Corp.

In the past two years, cutting overcapacity has also accelerated in China, as well as industrial mergers and reorganization, amid the government's effort to deepen supply-side structural reform.

The National Development and Reform Commission confirmed, on May 12, more than 150 million metric tons of coal capacity will be phased out this year, on top of the 69 million tons cut on May 10.

Chairman Xiao Yaqing of the State-owned Assets Supervision and Administration Commission (SASAC) said, in March, the country would deepen consolidation of State-owned enterprises this year, Bloomberg reported. The SASAC has yet to comment on the merger.

Bloomberg also reported Shenhua's assets reached 1.014 trillion yuan at the end of April, with a total power generating capacity of about 83 gigawatts. China Guodian had 803 billion yuan in assets and 143 GW of power-generating capacity at the end of last year, according to the report.