Bharti Airtel & Dialog Axiata Announce Merger of Sri Lanka Operations, Driving Stock Price Increase to Nearly 5%

Bharti Airtel Ltd saw a significant 5% increase in its share price on 18th April 2024, after announcing a definitive agreement to merge its operations in Sri Lanka with Dialog Axiata PLC and Axiata Group Berhad. In an announcement to the stock exchanges, the telecom company disclosed that the agreement involves the consolidation of operations among the three companies in the island nation.

Under the terms of the deal, Dialog will acquire complete ownership of Airtel Lanka. Dialog will issue ordinary voting shares to Bharti Airtel, representing a stake of up to 10.355% in Dialog's total issued shares, through a share swap transaction.

Bharti Airtel noted, "The completion of the transaction is subject to approval from Dialog's shareholders and meeting specific conditions outlined in the Share Sale Agreement, including clearance from the Colombo Stock Exchange (CSE) and completion of other applicable legal, corporate, and regulatory compliance procedures."

The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has already approved the merger plan, according to the telecommunications company. Ashish Chandra, CEO of Bharti Airtel Lanka (Private) Ltd, expressed, "The integration of Dialog and Airtel Lanka operations will create new opportunities for innovation and growth, benefiting consumers."

The merger is expected to generate economies of scale, leading to increased capital expenditure in the sector for high-speed broadband connectivity, voice, value-added services, operational efficiency, and cost savings by reducing infrastructure duplication.