KUALA LUMPUR: Axiata Group Bhd and India-based Bharti Airtel Ltd signed a definitive agreement to merge their operations in Sri Lanka.
According to a joint statement, Axiata’s subsidiary, Dialog Axiata, will acquire 100 per cent ownership of Airtel Lanka through a share swap arrangement.
Bharti Airtel will receive approximately 10.35 per cent of Dialog Axiata shares as part of the deal.
While the Telecommunications Regulatory Commission of Sri Lanka has granted approval for the merger, the transaction is subject to additional regulatory approvals.
The merger coincides with Axiata’s strategic move to divest some of its operations in frontier markets to improve its profit margins and reinforce its financial position.
Axiata is currently divesting its tower business in Myanmar for US$150 million (RM716.78 million) and withdrawing from the country due to deteriorating macroeconomic conditions and business challenges.
Additionally, in December of last year, Axiata sold its operations in Nepal at a loss after encountering prolonged regulatory hurdles and uncertainties over seven years.
The integration aims to capitalise on economies of scale and streamline infrastructure, resulting in technological and capital expenditure synergies.
According to the statement, this will enhance broadband connectivity, voice services, and value-added offerings while also yielding cost reductions and operational efficiencies.
Axiata group chief executive officer Vivek Sood stated that Dialog’s and Airtel Lanka’s merger aligns with Axiata’s strategy of consolidating markets and building resilience.
Sood highlighted that the merger will generate value for Dialog and Axiata shareholders through attainable synergies.
Bharti Airtel Lanka (Pvt) Ltd chief executive officer Ashish Chandra emphasised that the merger in Sri Lanka presents new prospects for innovation and growth, which will ultimately benefit consumers.
