Bharti Airtel Ltd. has signed a definitive agreement with Dialog Axiata Plc and Axiata Group Berhad to merge its Sri Lanka operations in a stock deal. Dialog will acquire 100% of the issued shares in Airtel Lanka and will issue a 10.355% stake in Dialog by way of a share swap under the agreement.
This consolidation will enable the merged entity to garner economies of scale, reduce duplication of infrastructure, and achieve synergies in technology and capital expenditure, leading to enhanced high speed broadband connectivity, voice and value-added services, cost saving and operational efficiencies, it said in a statement.
"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," said Gopal Vittal, managing director and chief executive officer of Bharti Airtel.
The Telecommunications Regulatory Commission of Sri Lanka has granted approval for the transaction, it said. However, the transaction is subject to the approval of Dialog's shareholders and other conditions. The share sale agreement also requires a go-ahead from the Colombo Stock Exchange, it said.
Airtel Lanka contributes 0.21% to Bharti Airtel's annual turnover and has a negative net worth of Rs 1,298.4 crore.
Shares of Bharti Airtel closed 6.3% higher on Thursday, as compared with a fall of 0.47% in the benchmark Nifty 50.
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