Social media giant Facebook has signed a deal to buy a 9.9% stake in Reliance Industries’ digital technologies subsidiary, Jio Platforms, for ₹43,574 crore (€5.25 billion).
Jio Platforms incorporates several services under its umbrella, including mobile network Reliance Jio, which has 388 million subscribers and has decimated its rivals in the mobile market since its launch in 2016.
Reliance Industries called the partnership “unprecedented in many ways” and said it was the largest minority stake investment by a technology company anywhere in the world and the largest foreign direct investment (FDI) in the technology sector in India.
Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, and one of Asia’s richest people, commented, “The synergy between Jio and Facebook will help realise Prime Minister Shri Narendra Modi’s ‘Digital India’ Mission with its two ambitious goals — ‘ease of living’ and ‘ease of doing business’ – for every single category of Indian people without exception.
“In the post-Corona era, I am confident of India’s economic recovery and resurgence in the shortest period of time. The partnership will surely make an important contribution to this transformation.”
A blog post from Facebook said, “Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India….In the face of the coronavirus, it is important that we both combat this global pandemic now, and lay the groundwork to help people and businesses in the years to come.”
It said one area of focus will be creating new ways for people and businesses to operate more effectively in the 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,” David Fischer, Chief Revenue Officer, Facebook, wrote.
As part of the deal, Jio Platforms, Reliance Retail Limited and WhatsApp, which is owned by Facebook, have entered into a commercial partnership agreement.
With the planned investment, Jio Platforms is valued at $65.95 billion “pre-money enterprise value”. The deal will also make Jio Platforms, launched in 2016, among the top five listed companies in India by market capitalisation. The transaction is subject to regulatory approvals.