Facebook has agreed to acquire a 9.99 percent stake in Jio Platforms for around $5.7 billion, making it one of the largest deals of the social media giant.
“Reliance Industries Limited (RIL), Jio Platforms Limited and Facebook, Inc. today announced the signing of binding agreements for an investment of Rs43,574 crore (around $5.7 billion) by Facebook into Jio Platforms,” RIL stated in the official press release.
With this deal, the Indian digital and telecom unit controlled by Mukesh Ambani, India’s richest man, has been valued at $65.95 billion.
Out of the total investment, $1.95 billion will be retained by Jio Platforms while the rest will be utilized to redeem the optionally convertible preference shares held by RIL.
Jio was established as the telecom unit of RIL, which with its cheap internet data-model disrupted the Indian telecom markets, gaining around 388 million subscribers. However, the company’s main aim is to become a wide digital platform which became clear as it continued to expand into other digital subsidiaries.
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“At the core of our partnership is the commitment that Mark Zuckerberg, founder of Facebook, and I share for the all-round digital transformation of India and for serving all Indians,” Mukesh Ambani, chairman and MD of RIL, said.
Targeting small businesses
As Facebook has strengthened its grip in the Indian markets, with a minority stake in a leading telecom company, the social media giant is aiming to reshape the small businesses in the country by bringing digital-based solutions.
“This is especially important right now, because small businesses are the core of every economy and they need our support. India has more than 60 million small businesses and millions of people rely on them for jobs,” Mark Zuckerberg said in an official statement.
Notably, India is also one of the key markets for Facebook’s primary social media platform and its messaging giant WhatsApp with 328 million and 400 million monthly users respectively.
“In the very near future, JioMart – Jio’s digital new commerce platform, and Whatsapp – will empower nearly 3 crore (30 million) small Indian Kirana shops to digitally transact with every customer in their neighbourhood. This means all of you can order and get faster delivery of day-to-day items, from nearby local shops,” Ambani added.