Bharti Airtel on Thursday announced plans to merge its Sri Lankan subsidiary, Airtel Lanka, with Dialog Axiata in a share swap deal.

Airtel Lanka, which began operations in 2009, contributed 0.21 per cent to Bharti Airtel’s overall business in FY2023. Airtel Lanka’s turnover in financial year 2023 was Rs 294 crore.

“Dialog Axiata PLC, Axiata Group Berhad (Axiata) and Bharti Airtel Limited signed a definitive agreement to combine their operations in Sri Lanka,” the statement said.

Under the agreement, Sri Lanka-based telecom operator Dialog will acquire 100 per cent of the issued shares in Airtel Lanka. Dialog will issue ordinary voting shares amounting to 10.35 per cent of its total issued shares as part of a share swap to Bharti Airtel.

The deal has received approval from Sri Lanka’s telecom regulator, the Telecommunications Regulatory Commission of Sri Lanka.

This merger aligns with the Axiata group’s strategy of market consolidation and is expected to generate value for shareholders of both companies through synergies. Axiata Group Berhad CEO Vivek Sood expressed respect for Airtel Lanka and its employees, looking forward to a smooth integration process.

The combined entity will benefit from Dialog Axiata’s extensive subscriber base of over 17 million, significantly larger than Airtel Lanka’s 5 million customers.

Dialog is a public limited liability company incorporated and domiciled in Sri Lanka and is listed on the Colombo Stock Exchange. Dialog was incorporated in Sri Lanka on August 17, 1993.

“The merger between Dialog and Airtel Lanka is aligned to Axiata’s strategy of market consolidation and resilience. The merger will create value for shareholders of Dialog Axiata PLC and of Axiata Group through achievable synergies,” Axiata Group Berhad group CEO and managing director Vivek Sood said.