US tech giant facebook buys 9.99 percent stake of Reliance Jio for $5.7 billion or Rs 43,574 crore in a deal which holds 10% stake of the telecom unit. Facebook took the decision as it looks to expand presence in its largest market in terms of subscriber base. No doubt, the multi-billion-dollar deal will make Facebook the largest minority shareholder in Jio Platforms Limited.
Facebook in a statement said, “Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Ltd, part of Reliance Industries Ltd, making Facebook its largest minority shareholder.”
Mukesh Ambani’s RIL said that it 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 partnership will help Reliance to cut its debt burden which swelled to more than $40 billion as of September. On the other hand, the deal will help facebook to get a firm foothold in a fast-growing and massive market.
Commenting on the partnership with Facebook, RIL chairman Mukesh Ambani said, “When Reliance launched Jio in 2016, we were driven by the dream of INDIA’S DIGITAL SARVODAYA – India’s Inclusive Digital Rise to improve the quality of life of every single Indian and to propel India as the world’s leading Digital Society. All of us at Reliance are therefore humbled by the opportunity to welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India for the benefit of all Indians.”
“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,” he added.
WhatsApp, which attracted 340 million users in the country, is also trying to secure approval to start its digital payment service in India. WhatsApp, Jio and Reliance Retail have agreed for a commercial partnership agreement to further accelerate Reliance Retail’s new commerce business. Mumbai-headquartered Reliance has rapidly expanded its retail presence in the market with over 10,000 stores selling groceries, consumer electronics and apparel.
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.”