Etisalat Lanka and Hutch to merge; CK Hutchison to hold controlling stake

Hong Kong’s CK Hutchison and Emirates Telecommunications Corp (Etisalat) of the UAE have announced a deal to merge their respective Sri Lankan mobile operating subsidiaries, Etisalat Lanka and Hutchison Telecommunications Lanka (Hutch), with CK Hutchison to hold a controlling majority stake in the enlarged company. The merger, which forms part of Abu Dhabi-based Etisalat’s strategy of portfolio optimisation, was confirmed via the Abu Dhabi Securities Exchange in a joint statement declaring that the deal will leave both Hutch and Etisalat Lanka ‘better positioned to serve their Sri Lankan customers’. The Securities Exchange filing noted, however, that the merger is subject to several conditions, not least of which are the mandatory competition and regulatory approvals in Sri Lanka. If ratified, the takeover would see the Sri Lankan mobile market – currently led by Dialog Axiata and Mobitel – reduced from five operators to four. Etisalat Lanka currently holds a ten-year licence from the Telecommunications Regulatory Commission Sri Lanka (TRCSL) to operate mobile services, but the concession expires in September this year.