Under the terms of the agreement Dialog, Axiata’s brand in Sri Lanka, will acquire 100% of the issued shares in Airtel Lanka. Dialog will then issue Bharti Airtel ordinary voting shares which will amount to 10.355% of total issued shares.
The structure of the deal essentially means that Axiata are buying Airtel, with Airtel maintaining a minority stake.
The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has granted its approval for the proposed merger, but it still requires clearance from the Colombo Stock Exchange and the approval of Dialog's shareholders.
Airtel believe the consolidation will enable the merged entity to garner economies of scale and reduce duplication of infrastructure.
Synergies in technology and capital expenditure will also lead to enhanced high speed broadband connectivity, voice and value added services, cost savings and operational efficiencies, it said.
In the mobile space, Airtel and Axiata compete with SLTMobitel, CK Hutchinson and LankaBell.
Rumours of a merger between the two companies have been swirling since way back in 2018, and the two operators announced their intentions to do so almost a year ago.
“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,” Dr Hans Wijayasuriya, CEO telecommunications business and group executive director of Axiata said.
“We look forward to the new frontiers in customer experience and innovation the company will deliver to Sri Lankan consumers and enterprises,” he added.
Gopal Vittal, MD & CEO at Bharti Airtel Limited said Airtel were happy to have merged the two businesses.
“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,” he said.
