Sri Lankan telco Dialog Axiata said that it has officially take 100% control of rival telco Bharti Airtel Lanka via a share swap, sealing a deal that has been in the works for over a year.
As part of the share swap deal, Dialog’s parent company, Malaysia-based Axiata Group, will reduce its share in Dialog from 83% to 73.75%, while India’s Bharti Airtel will own 10.355%. The remaining 15.895% of shares will be held by the public.
Dialog said it plans to amalgamate Airtel Lanka under the applicable provisions of the Companies Act, with Dialog remaining as the amalgamated entity. It will also start work to integrate the two networks, although it will continue to operate under both the Dialog and Airtel brands for their respective customers.
The merger has been officially on the table since May 2023, with a definitive agreement finally signed in April this year. Dialog says the merger will enable it to leverage economies of scale, reduce duplication of infrastructure, save costs and improve operational efficiencies.
“This merger positions us to drive substantial growth, not just in customer experience and innovation, but also in contributing to the digital economy of Sri Lanka,” said Dialog Axiata CEO Supun Weerasinghe in a statement.
If nothing else, the deal widens the gap between market leader Dialog and its remaining two competitors, SLT-Mobitel and Hutch Lanka, who rank second and third, respectively. Dialog already leads the market with close to 18 million subscribers for an estimated 57% market share. The Airtel Lanka deal adds another estimated 5 million to Dialog’s subscriber base.