Axiata Group and Bharti Airtel finalised a deal to merge their operations in Sri Lanka, consolidating the market down to three major players a year after proposing a tie-up.

The companies signed a definitive agreement, with Dialog Axiata to acquire 100 per cent of the issued shares in Airtel Lanka.

In May 2023, Dialog and Bharti Airtel signed a binding term sheet to merge.

The deal requires Dialog shareholders approval and specific conditions outlined in the share sale agreement to be met, including clearance from the Colombo Stock Exchange and completion of other legal, corporate and regulatory compliance procedures. 

The Telecommunications Regulatory Commission of Sri Lanka approved the proposed merger.

In a statement, Axiata noted the tie-up will enable the merged entity to gain economies of scale and reduce duplication of infrastructure, aiding cost savings and operational efficiencies.

Data from GSMA Intelligence showed Dialog closed March with 16.4 million connections and Airtel Lanka about 3 million. Number 2 Mobitel ended Q1 with 8.3 million connections, while Hutch Sir Lanka had 3.1 million.