Social media behemoth Facebook has acquired a 9.9% stake in the Indian telecom giant Reliance Jio for Rs 43,574 crore or $5.7 billion. This is for the very first time when Jio has diluted its stake to any other company for a strategic investment.
The deal values Jio at Rs 4.62 lakh crore~$65.95 billion.
For Facebook, Jio is its third investment in India and by far the largest investment by any technology company for a minority stake anywhere in the world and the largest in the FDI in the technology sector in India.
Commenting on the deal, Facebook said that the move would also accelerate Jio to pursue its vision of enabling ‘Digital India’ for 1.3 billion Indians and Indian businesses, especially 60 million small merchants, micro-businesses, and farmers.
“In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio,” Facebook said in a statement.
As Jio is also looking to pay back most of its debt by 2021, the deal stands significant for the company in that aspect as well. It had reported a total debt of nearly Rs 1,450 crore in FY19 and was expected to reach more than Rs 1,700 crore by the end of FY 2021.
The development comes around one month after Facebook and Jio were in advanced talks for this partnership. However, travel restrictions due to the coronavirus pandemic had delayed the agreement. Both companies are also reportedly working to develop a multi function super-app.
Following the latest investment, Jio platforms, Reliance Retail, and WhatsApp have also entered a commercial partnership agreement under which Reliance Retail’s New Commerce business would be accelerated on the JioMart platform using WhatsApp.
For instance, by bringing together Jio’s small business initiative JioMart and the reach of WhatsApp can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience.
Back in 2014, Facebook had acquired Bengaluru-based Little Eye Labs in a $10-15 million deal.