Social media giant Facebook on Wednesday bought a 10 percent stake in the Reliance Jio platform as the company looks to expand its presence in the largest market in terms of subscriber base. Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd (RIL), houses digital services of the group. Reliance Jio Infocomm Ltd, with 388 million subscribers, is a wholly-owned subsidiary of Jio Platforms. In a Facebook post, Mark Zuckerberg said one focus of the collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy. “For instance, by bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience.”
Reliance Jio-Facebook deal: Here's what we know so far
- Jio Platforms, Reliance Retail Limited and WhatsApp have entered into a commercial partnership agreement as result of this deal.
- This deal has been done to further accelerate Reliance Retail’s New Commerce business on the JioMart platform using Facebook-owned WhatsApp and to support small businesses on the messenger
- This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India.
- The investment values Jio Platforms amongst the top 5 listed companies in India by market capitalization
- So far, Reliance Jio has invested in Haptik, Saavn, Den, Datacom and Hathaway.
- According to a report, a settlement with Facebook will assist Mukesh Ambani fulfill its bold plan to scale back debt of Reliance Industries Ltd.
- The Facebook deal is part of value unlocking by RIL to cut debt. RIL has been seeking strategic partnerships across its businesses while targeting to deleverage its balance sheet
- The latest deal is a win-win for both Facebook and Jio. It would give Facebook deeper access to India, the second largest internet market after China.
- From an RIL perspective, it could leverage on Facebook's technology expertise and talent pool as well as help in its ambitions to make Jio a digital company. This apart, the deal would aid the company achieving zero debt status by March 2021.
- The transaction, RIL said, is subject to regulatory and other customary approvals. Morgan Stanley as a financial advisor and AZB & Partners and Davis Polk & Wardwell as counsels advised RIL on the transaction.
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