Bharti Airtel announced on Thursday that the telecom company has signed a definitive agreement with Dialog Axiata (Dialog) and Axiata Group (Axiata) to merge operations in Sri Lanka. Dialog Axiata, a subsidiary of Axiata Group, operates Sri Lanka's Quad-Play Connectivity Service Provider.
Agreement and Acquisition
Under this agreement, Dialog will acquire 100 percent of the issued shares in Airtel Lanka. In consideration of this acquisition, Dialog will issue ordinary voting shares to Bharti Airtel, amounting to 10.355 percent of the total issued shares of Dialog, through a share swap, Bharti Airtel said in a statement.
Airtel and Dialog Axiata first announced plans to combine operations in Sri Lanka in May 2023. The transaction is subject to the approval of Dialog's shareholders and is pending the completion of specific conditions outlined in the Share Sale Agreement, including clearance from the Colombo Stock Exchange (CSE) and completion of other applicable legal, corporate, and regulatory compliance procedures, the Exchange filing said.
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Regulatory Approvals
The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has granted its approval for the proposed merger, "underscoring its vision to advance the adoption of telecommunications services across Sri Lanka."
Axiata Group Berhad said, "The merger between Dialog and Airtel Lanka is aligned with Axiata’s strategy of market consolidation and resilience. The merger will create value for shareholders of Dialog Axiata PLC and 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.”
Axiata added, "This merger brings together the strengths of two leading telco groups and bodes well for the growth and sustainability of Sri Lanka’s flagship Telecom Sector. We look forward to the new frontiers in Customer Experience and innovation the company will deliver to Sri Lankan Consumers and Enterprises."
Commenting on the merger, Bharti Airtel said, "We are happy to merge our Sri Lanka operations with Dialog. Given the scale and unique propositions they offer, we are certain that our customers will continue to enjoy cutting-edge services on a seamless network."
Future Prospects
The integration of Dialog and Airtel Lanka operations is expected to enable the merged entity to garner economies of scale, reduce duplication of infrastructure, achieve synergies in technology and capital expenditure, leading to enhanced high-speed broadband connectivity, voice, and value-added services, cost savings, and operational efficiencies.
