Dialog Axiata struck an agreement with Bharti Airtel to merge their respective operations in Sri Lanka, a move to further cement the Malaysia-based operator’s top-tier status in the nation.

In a joint statement, the companies revealed they had signed a binding term sheet to merge, with the proposed transaction giving Airtel a stake in Dialog which values the business fairly.

Airtel will receive new shares in Dialog upon completion of the transaction.

Financial details were not disclosed and the companies added discussions with the relevant regulators are ongoing.

Definitive terms also still need to be signed and the deal needs shareholder approval.

GSMA Intelligence estimates for Q1 place Dialog’s total mobile connections at 17.9 million and Airtel Lanka 3.1 million.

However, Airtel has a vast presence in the country, operating across 25 districts and with a distribution network of more than 50,000 retailers.

The Economic Times reported the pair discussed a merger in Sri Lanka in 2016, but did not reach an agreement.

A CK Hutchison acquisition of Etisalat’s operations in Sri Lanka in 2018 was the last big deal to date.