NEW DELHI: Bharti AirtelBSE -0.24 % has merged its unit in Bangladesh with Robi Axiata Ltd., a unit of Axiata Group Berhad, a move which will form a strong No. 2 mobile phone operator in what is a fiercely competitive market led by Telenor unit Grameenphone.
Post the merger, Axiata and Airtel will hold 68.7% and 25% stake, respectively, in the combined entity which will have around 32.2 million customers and operate under the Robi Axiata brand. The remaining 6.3% stake will be held by Japan’s NTT DoCoMo, the Indian telco said in a statement Wednesday.
The merger is a part of Airtel’s initiative to restructure operations in all markets where it trails one or more market leaders. The Indian market leader had entered Bangladesh by acquiring 70 percent stake in Warid Telecom in 2010, which it raised to 100% in 2013.
Prior to the merger, Airtel was the fourth largest in Bangladesh among six operators, while Robi Axiata was ranked No. 2.
The Sunil Mittal-led telco said the merger was completed following the fulfillment of the condition precedents to the agreement and filing of the merger order with the Registrar of Joint Stock Companies and Firms of Bangladesh Court on Wednesday.
Wednesday, Bharti Airtel’s shares rose 2.2% to Rs309.55 on the Bombay Stock Exchange, outperforming a flat broader market.
Airtel said that the combined entity “is well positioned to deliver an unparalleled portfolio of innovative mobile and broadband offerings at affordable rates with deep network coverage. It added that the merger strengthens the long-term sustainability of the Bangladesh telecoms landscape and business environment.
The merger will also secure faster nationwide rollout of mobile broadband as well as contribute significantly to the overall economy of the country, the telco said.
Both the companies first entered into an exclusive discussion to explore the possibility of combining the business operations in Bangladesh on September 9, 2015, followed by an agreement on January 28 this year.
Earlier in January, Bharti Airtel’s Managing Director and CEO (India and South Asia) Gopal Vittal had said that there was a compelling rationale for bringing together the strengths of both entities. He had then said that the combined entity will be well positioned to leverage the operational synergies to serve customers better.
Moody’s Investors Service said that the merger of Bharti Airtel and Axiata Group’s telecom units in Bangladesh will be “credit positive” for both parent companies.
It added that the Robi-Airtel merged entity will be the largest spectrum holder in both 900 Mhz and 1800 Mhz bands with 12 units and 17 units of such airwaves respectively.
