The world’s largest social media company, Facebook has invested $5.7 billion in India’s Reliance Jio platforms for a 9.99 per cent stake. This makes the deal one of the largest Foreign Direct Investment (FDI) deals in the technology sector in India.
The deal values Jio at a whopping $65.95 billion pre-money enterprise value.
Reliance Jio is the biggest telecom operator in India, with more than 385 million subscribers. It is also a subsidiary of Reliance Industries, which is India’s most valued company and is owned by the richest man in India Mukesh Ambani.
Post the deal, Facebook will be the largest minority shareholder in Reliance Jio. This will also be a golden opportunity for Mark Zuckerberg, the CEO of Facebook, to find a foothold into the Indian market. The online messaging platform WhatsApp, which is also owned by Facebook, has 400 million users in India whereas Facebook has 350 million, the largest customer base in any country in the world.
Hinting that the two organizations are collaborating to open up job opportunities to the vast Indian population, Mark Zuckerberg said, “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. 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. I want to thank Mukesh Ambani and the entire Jio team for their partnership. We’re looking forward to getting started.”
Mukesh Ambani was also optimistic about the collaboration, saying, “The synergy between Jio and Facebook will help realize 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.”
Shri Mukesh D. Ambani, Chairman, Reliance Industries Limited welcomes Mark Zuckerberg, founder @Facebook Inc as a long term and esteemed partner.#WithLoveFromJio #Jio #Facebook #MarkZuckerberg#MukeshAmbani #RelianceJio #JioDigitalLifehttps://t.co/RoHrxUpxZF
— Reliance Jio (@reliancejio) April 22, 2020
Will this deal bring in more value to both the organizations? Only time will tell.