Axiata and Airtel sign agreement to merge operations in Sri Lanka


The move will be facilitated by a stake swap, with Dialog Axiata taking 100% ownership of Airtel Lanka in exchange for giving Bharti Airtel a 10.4% stake in Dialog Axiata

Today, Bharti Airtel and Dialog Axiata have jointly announced the signing of a formal agreement to merge their Sri Lankan operations.

The deal, which was first announced almost a year ago, will take place via an equity swap, with Bharti Airtel swapping 100% of its shares in its Sri Lankan unit, Airtel Lanka, for a 10.4% stake in its local rival Dialog Axiata.

The move see Airtel Lanka’s 5 million mobile subscribers integrated with Dialog Axiata’s 17 million, giving Dialog Axiata an even larger lead in the Sri Lankan market, with a market share of over two-thirds.

Rivals Hutch and SLT Mobitel have roughly 3.5 million and 7.5 million subscribers, respectively.

“This consolidation will enable the merged entity to garner economies of scale, reduce duplication of infrastructure, achieve synergies in technologies and capital expenditure, leading to enhanced high-speed broadband connectivity, voice and value-added services, cost savings, and operational efficiencies,” read a joint statement from Airtel and Dialog Axiata.

“The merger between Dialog and Airtel Lanka is aligned to Axiata’s strategy of market consolidation and resilience,” said Vivek Sood, Axiata Group Berhad’s Group CEO and Managing Director. “The merger will create value for shareholders of Dialog Axiata PLC and of Axiata Group through achievable synergies. We have the utmost respect for Airtel Lanka and its employees and look forward to working together as we integrate the two companies.”

According to the statement, the merger has already received regulatory approval from the Telecommunications Regulatory Commission of Sri Lanka.

The timeline for the mergers finalisation has not been announced.

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