Dialog, Axiata Group, Bharti Airtel sign agreement to merge operations in Sri Lanka

Dialog Axiata PLC, Axiata Group Berhad and Bharti Airtel Limited have signed a definitive agreement to combine their operations in Sri Lanka.

Under the agreement, Dialog will acquire 100 percent of the issued shares in Airtel Lanka, in consideration of which Dialog will issue to Bharti Airtel, ordinary voting shares which will amount to 10.355 percent of the total issued shares of Dialog by way of a share swap, Bharati Airtel said in a disclosure to the exchanges on April 18.

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 compliance procedures.

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, the release from Airtel said.

This consolidation will enable the merged entity to garner economies of scale and 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.

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

Commenting on the development, Hans Wijayasuriya, CEO of Telecommunications Business and Group Executive Director of 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.”

Gopal Vittal, MD & CEO of Bharti Airtel Limited, 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 cuƫing edge services on a seamless network.”

“The integration of Dialog and Airtel Lanka operations will unlock new opportunities for innovation and growth, and this will lead to benefit consumers.” Ashish Chandra, CEO, Bharti Airtel Lanka (Private) Limited.

Shares of Bharti Airtel were trading at Rs 1,220.55 at 10:21 am on April 18.