Facebook invests Rs. 43,574 crore in Jio, a unit of Reliance Industries Limited for 9.99% shares to help oil-toretail merging the separate and diverse firms to reduce debt and also to strengthen the social-media platforms in its largest market, frankly speaking for its Whatsapp Unit.
Reliance Group shares 10.3% higher at Rs 1,363.35 on BSE Wednesday, surged more than 12% in intraday trade. This transaction to Jio at Rs. 4.62 lakh crore which is the parent of phone and data unit of Reliance Jio Info and various other digital platforms of Jio such as Jio-Saavn, JioMart, & JioCinema. Jio strategy head Anshuman Thakur said in a conference call to the reporter that Facebook will get a seat on Board of Jio platform along with that of an observer.
Facebook buys 9.9% stake in Reliance Jio
According to a report of Economic Times, on 17th April Facebook and RIL were exploring the uniqueness and possibility to create a super application like China’s WeChat by leveraging the reach of Jio under Whatsapp ubiquity.
Independent working Entities
Based on the Business Model, both Whatsapp and Jio will remain independent entities, however compete where necessary with the respective business models and will also collaborate where they see synergies, Anshuman Thakur said.
Reliance Retail, Jio and Whatsapp also signed a commercial pact to cross-leverage the e-commerce platform to grow the business, both companies said separately in statement on Wednesday. This initiative has been taken for the consumers to access the nearest ration shops for products and services to their homes by seamlessly transacting with JioMart using the Whatsapp, Reliance said in a statement.
Jio Platforms Limited. Reliance Limited and Facebook announced today the signing of the binding agreement for an investment by Facebook of Rs. 43,574 Crores to Jio Platforms. This investment by Facebook values the Jio Platform at Rs. 4.62 lakh crore pre money enterprise value approx. to $65.95 billions, assuming a conversion rate of Rs. 70 of US dollar. Only approval is needed to be taken from Competition Commission of India, Jio officials said.
According to the govt. officials, the deal would be closely scrutinized by Anti-Trust WatchDog giving both the companies the private data of millions of Indians, which can combine undue advantage against rivals like Google, Amazon or the local startups.
“The core of the partnership is worth a commitment that Mark Zuckerberg (Founder of Facebook) and I share the all-round digital transformation for serving the Indians. In this post-corona era, I am very much confident of the recovery of India’s Economy and the resurgence in shortest period of time,” said by MD and Chairman of RIL Mukesh Ambani.
