27 April 2018 09:55 am
The parent companies of Hutchison Telecommunications Lanka (Pvt) Ltd. and Etisalat Lanka (Pvt) Ltd. have entered to into a definitive agreement to merge the operations of the two companies.
“CK Hutchison Group (CKHH Group) and Emirates Telecommunications Group Company PJSC (Etisalat Group) have entered into a definitive agreement to merge their mobile telecommunications businesses in Sri Lanka, operating under Hutchison Telecommunications Lanka (Private) Limited (Hutch Lanka) and Etisalat Lanka (Private) Limited (ESL) respectively,” a joint media release said.
“The combined business of Hutch Lanka and Etisalat Lanka will be better positioned to serve their Sri Lankan customers,” it added.
The financial details of the merger are yet to be announced. The communiqué also said the transaction is part of the stated strategy of portfolio optimization of the Etisalat Group.
“Upon completion of the transaction, CKHH Group will have the majority and controlling stake in the combined entity.”
The two companies said the transaction is subject to a number of conditions precedent, which include, among others, securing the necessary competition and regulatory approvals in Sri Lanka.
An industry consolidation was long expected in Sri Lanka’s mobile telephony market, which currently has five players. “We expect some industry consolidation due to on-going intense competition, especially in the mobile segment; this segment has five operators that face investment requirements that are still high, and the smaller operators are unprofitable,” Fitch Ratings said in a recent rating report.