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China's coal mining giant Yankuang Group will merge with Shandong Energy Group, a statement by the Shandong Energy Group said on Monday. The merger is likely to be completed within a year, and the new company is expected to become China's second-largest coal miner.

After the reorganization of the two groups in East China's Shandong Province, the newly incorporated company will continue to operate under the name Shandong Energy Group, a source close to Yankuang told the Global Times Monday. It is expected to become China's second-largest coal producer, just behind the state-owned China Energy Investment Corporation (CEIC).

Both Yankuang and Shandong Energy are owned by the Shandong Provincial Stated-owned Assets Supervision and Administration Commission. 

Li Xiyong, chairman of Yankuang, will be chairman of the new Shandong Energy Group, and Man Shengang, a member of the Standing Committee of the Party Committee of Shandong Energy Group, will serve as president of the new company, the source said.

Yankuang produced 166 million tons of coal in 2019,  and Shandong Energy produced 125 million tons, according to media reports.

The new company's assets are expected to top 637.9 billion yuan ($91.2 billion), with operating revenues of 637.1 billion yuan, said the statement. The two companies' combined operating revenues in 2019 surpassed those of Carrefour, which ranked 81th on the Fortune Global 500 list last year.

The new company will further consolidate traditional coal industries including coal mining, coal-fired power generation and coal chemicals, and will extend to other emerging industries such as high-end equipment and new energy materials, according to the statement. 

"Consolidating the assets of the two companies will take time, estimated at one year, by which time the restructuring will have been completed," the source said. 

The merger of Yankuang and Shandong Energy comes as China forges ahead with the reform of its stated-owned enterprises. The newly merged company will further increase its competitiveness on the market as it will have a whole industrial chain integrating coal production, coal-fired power plants and coal chemicals, analysts said.