Facebook to Acquire $5.7bn Stake in India's Reliance Jio
By Sebastian Moss, Data Centre Dynamics
April 22, 2020
Facebook plans to acquire a 9.99 percent equity stake in Jio Platforms, the holding company of telecom Reliance Jio Infocomm.
The INR 435.7 billion ($5.7 billion) deal allows the social media and advertising company to increase its foothold in India, its largest market. The transaction is subject to regulatory and other customary approvals.
“This is the largest investment for a minority stake by a technology company anywhere in the world and the largest [foreign direct investment] in the technology sector in India,” Jio said in a statement. “The investment values Jio Platforms amongst the top five listed companies in India by market capitalization, within just three and a half years of launch of commercial services.”
Launched in September 2016, Jio currently has over 388 million users, after the division of Reliance Industries offered radically low mobile data prices – a move that also left the company deeply in debt and in need of investment.
“With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses,” Mark Zuckerberg said in a Facebook post.
“This is something we can help with – and that's why we're partnering with Jio to help people and businesses in India create new opportunities.” Discussions, which were first reported last month, began before Covid-19.
Facebook said that it plans to combine its WhatsApp messaging platform with Reliance Retail's JioMart. The platform helps users find nearby family stores and order products and services from home.
In March, Reuters reported that Google was also looking to acquire a stake in Reliance Jio, but the discussions were in an early stage. Last year, Jio partnered with Microsoft to build Azure data centers across India over the next decade.