Major Deal In Sri Lanka Sends Airtel Stocks Flying 5%: Here's Why

Shares of Bharti Airtel were gaining on Thursday after the telecom major said it would merge its unit in Sri Lanka with a major peer in the country.

What Happened: Bharti Airtel announced the merger of its Sri Lanka operations with Dialog Axiata, Sri Lanka’s biggest telecom operator, in an equity swap deal.

Airtel Lanka, which contributed 0.21% to Bharti Airtel’s overall business with a turnover of ₹294 crore in FY23, will now be fully acquired by Dialog Axiata, owned by Malaysia-based Axiata Group. The merger agreement involves Dialog issuing ordinary voting shares to Bharti Airtel, amounting to 10.355% of Dialog’s total issued shares.

See Also: Why Nestle India Stock Just Marked Its Steepest Drop In Three Years

The Telecommunications Regulatory Commission of Sri Lanka has approved the merger, in a bid to improve telecom services in Sri Lanka. Airtel Sri Lanka began its operations in 2009.

Dialog Axiata is a publicly traded company listed on the Colombo Stock Exchange, incorporated in Sri Lanka since 1993. Axiata Group CEO and Managing Director Vivek Sood said the merger aligns with Axiata’s strategy of market consolidation and resilience. He added that the merger will create shareholder value through achievable synergies and looks forward to integrating the two companies.

With this merger, Dialog Axiata’s subscriber base will increase to over 17 million users, while Airtel Lanka serves over 5 million customers.

Price Action: Bharti Airtel’s share price was up 4.76% at ₹1,274.35 in afternoon trade.

Read Next: Adani’s Next Big Venture: $5B Investment Said To Be Earmarked Over 5 Years