Monday 16 Dec 2024
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KUALA LUMPUR (June 27): Axiata Group Bhd's (KL:AXIATA) 83%-owned Dialog has completed its acquisition of Airtel Lanka — a wholly-owned subsidiary of India’s Bharti Airtel.

In a bourse filing, Axiata said Airtel Lanka is now a wholly-owned unit of Dialog, and was acquired by issuing 952.7 million shares representing 10.355% of Dialog's enlarged issued shares to Bharti Airtel.

The acquisition is part of an agreement inked between Axiata, Dialog and Bharti Airtel in April to combine their operations in Sri Lanka.

“This consolidation will enable the merged entity to garner economies of scale and reduce duplication of infrastructure, achieve synergies in technology and capital expenditure leading to enhanced high-speed broadband connectivity, voice and value-added services, cost savings and operational efficiencies,” according to a joint statement from the companies then.

However, analysts had raised concerns over the merger as Airtel Lanka has been in the red and reported a net loss of RM245.4 million for its financial year 2023.

"Therefore, Dialog will be subject to earnings volatility if Airtel's earnings performance falls short of expectations," TA Securities said following the announcement of the deal.

Kenanga Investment Bank, on the other hand, said the earnings drag from Airtel Lanka might not persist for long and that the merger would enable Dialog Axiata to consolidate its leading market share in Sri Lanka.

Dialog Axiata is the largest telecommunications service provider in Sri Lanka with more than 17 million subscribers, while Airtel has around five million subscribers.

Axiata shares closed six sen or 2.31% lower to RM2.54, valuing the group at RM23.32 billion. Year to date, the group has gained 5.83%.

Edited ByTan Choe Choe
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