KUALA LUMPUR: Axiata Group Bhd's Sri Lanka subsidiary Dialog Axiata Plc plans to acquire Bharti Airtel Lanka (Private) Limited (Airtel Lanka) from Bharti Airtel Limited in exchange for a 10.355 per cent interest in Dialog.
Dialog, Sri Lanka's leading quad-play connectivity provider, will acquire a 100 per cent interest in Airtel Lanka, in consideration of which Dialog will issue to Bharti Airtel by way of a share swap, equivalent to 10.355 per cent of the enlarged total issued shares of Dialog.
The transacion is subject to the approval of Dialog's shareholders and is pending the completion of specific conditions outlined in the definitive agreements, including clearance from the Colombo Stock Exchange and completion of other regulatory compliance procedures.
Axiata in a filing with Bursa Malaysia Securities said Dialog, Airtel Lanka and Bharti Airtel signed a definitive agreement to combine their operations in Sri Lanka.
Dialog is listed on the Colombo Stock Exchange, and the market leader in mobile, digital pay television, fixed telecommunications and international services sectors, along with a robust footprint and market presence in digital services, financial services, and IT services.
Dialog is Sri Lanka's largest foreign direct investor with investments totalling US$3.25 billion.
Airtel Sri Lanka started commercial services in Sri Lanka in 2009 and was the fastest operator to reach one million customers.
In a statement, the company said the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has granted its approval for the proposed merger.
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. Axiata Group Bhd group chief executive officer (CEO) and managing director Vivek Sood said the merger between Dialog and Airtel Lanka is aligned to Axiata's strategy of market consolidation and resilience.
The merger will create value for the shareholders of Dialog Axiata PLC and Axiata Group through achievable synergies.
Bharti Airtel Limited managing director and CEO Gopal Vittal said the company is happy to merge its 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," he added.
Axiata's share price was down 1.92 per cent to RM2.55 a share at midday break.