Telecom operator Bharti Airtel will merge its Sri Lanka operations with Dialog Axiata in an equity swap deal, a joint statement said on Thursday.

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Airtel Lanka's turnover in financial year 2023 was Rs 294 crore and it contributed 0.21 per cent to Bharti Airtel's overall business.

"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, in consideration of which Dialog will issue to Bharti Airtel, ordinary voting shares which will amount to 10.355 per cent of the total issued shares of Dialog by way of a share swap, it said.

Airtel Sri Lanka commenced commercial operations in Sri Lanka in 2009.

"The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has granted its approval for the proposed merger, underscoring its vision to advance the adoption of telecommunications services across Sri Lanka," the statement said.

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. We have the utmost respect for Airtel Lanka and its employees and look forward to working together as we integrate the two companies," Axiata Group Berhad, Group CEO and Managing Director, Vivek Sood said.

Dailog Axiata has a subscriber base of over 17 million. Airtel Lanka has over 5 million customers.