Social media giant Facebook will pick up 9.99 percent stake in Reliance Jio, the telecom unit of Reliance Industries Ltd (RIL), for Rs. 43,574 crore ($5.7 billion) on a fully diluted basis.
In a press release today, RIL announced the signing of binding agreements by Facebook into Jio Platforms and the investment values Jio Platforms at Rs. 4.62 lakh crore pre-enterprise money ($ 65.95 billion -assuming a conversion rate of Rs. 70 to a US Dollar).
Terming the partnership unprecedented in many ways, the oil-to-telecom conglomerate added, “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.”
Commenting on partnership, Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said, “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.”
He also added, “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.”
Facebook founder and CEO Mark Zuckerberg said the company is teaming up with Jio Platforms committing to work together on some major projects that will open up commerce opportunities for people across India.
In a Facebook post, Zuckerberg said, “India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country is in the middle of a major digital transformation and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online.”
“India has more than 60 million small businesses and millions of people rely on them for jobs. 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,” he added.
Morgan Stanley as financial advisor and AZB & Partners and Davis Polk & Wardwell as counsels advised on the transaction. The transaction is subject to regulatory and other customary approvals.