Axiata Group Berhad (Axiata) and Bharti Airtel Limited (Bharti), on Thursday signed a Definitive Agreement to merge their respective telecommunication subsidiaries in Bangladesh named-Robi Axiata Limited (Robi) and Airtel Bangladesh Limited (Airtel), reports news agency UNB.
The combined entity operating as Robi will serve approximately 40 million customers, says a press release.
The agreement follows the 9 September 2015 announcement of both parties entering into an exclusive discussion to explore possibility of combining the business operations in Bangladesh.
The joint strengths of Robi and Airtel will deliver the widest mobile network coverage across Bangladesh, strengthening its position in the mobile internet segment as well as consolidating its position as the second largest operator in the country.
The proposed transaction is subject to conditions precedent including receiving applicable approvals from relevant authorities and is expected to complete in the first half of 2016, it said.
Upon completion, Axiata will hold 68.3% controlling stake in the combined entity, while Bharti will hold 25%. The remaining 6.7% will be held by the existing shareholder, NTT DOCOMO of Japan.
Supun Weerasinghe, chief executive officer of Robi said, “The highly competitive and crowded Bangladesh telecommunications sector solicits consolidation and we believe this merger will form greater economies of scale for both Groups.”
Dato’ Sri Jamaludin Ibrahim, president and group chief executive officer of Axiata said, “In line with Axiata’s merger and acquisition strategy, in-country consolidation has been one of the Group’s key focus in solidifying its position, unlocking profitability of the market and ensuring long term growth.”
“Axiata’s track record of successful strategic mergers and integrations in its other markets such as Indonesia, Sri Lanka and Cambodia further qualifies the Group to lead market consolidation in Bangladesh.”
Gopal Vittal, managing director and CEO (India and South Asia), Bharti Airtel said, “There is a compelling rationale for bringing together the strengths of both entities.”
Source: Prothom Alo