Bharti Airtel divests Sri Lanka operations, merges with Dialog Axiata

Dialog Axiata will become the merged entity and will acquire 100% of the issued shares in Airtel Lanka. Bharti Airtel will get ordinary voting shares amounting to 10.355% of the total issued shares of Dialog.

Airtel’s operations under Airtel Lanka will be integrated with Dialog Axiata, and the brand Airtel will cease to exist after the merger. Airtel Lanka’s 5 million customers will be serviced by the merged entity and brand Dialog Axiata, people familiar with the development said.

Dialog Axiata is Sri Lanka’s largest mobile network operator with 17.4 million subscribers, which amounts to 57% of the Sri Lankan mobile market. Dialog Axiata Plc, Axiata Group Bhd and Bharti Airtel first announced the merger on 2 May 2023, and on Thursday they signed a definitive agreement to combine their operations.

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 and completion of other applicable legal, corporate and regulatory compliance procedures, the companies said in a joint statement.

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, the companies added.

Vivek Sood, group CEO and managing director of Axiata Group, said that the merger was aligned with Axiata’s strategy of market consolidation and it will create value for shareholders of Dialog Axiata and of Axiata Group through achievable synergies.

Gopal Vittal, MD & CEO Bharti Airtel Ltd. 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.”

“It is a privilege to welcome the team at Airtel Lanka to the Dialog family and together we take a significant step forward in our commitment to delivering superior telecommunications services in Sri Lanka,” said Supun Weerasinghe, director / group chief executive officer of Dialog Axiata PLC.

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Published: 18 Apr 2024, 05:51 PM IST