Reliance Jio Sells 9.99% Stake To Facebook For Rs 43,574 Crore: 3 Things That Can Happen Now
Amidst the coronavirus outbreak, India’s largest tech deal has just happened.
Facebook, world’s biggest social network has now bought 9.99% stake in Reliance Jio, India’s biggest telecom network. For acquiring controlling stake of 9.99%, Facebook shelled out Rs 43,574 crore or $5.7 billion.
This makes this as India’s biggest FDI investment in tech sector.
Facebook Now Owns 9.99% Stake In Reliance Jio
This mega deal of Rs 43,574 crore puts Jio’s pre-money enterprise value as Rs 4.62 lakh crore.
We had already speculated about such a deal few days back, which has now finally happened.
Mukesh Ambani, Chairman of Reliance Industries said, “…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,”
In a separate statement, Facebook acknowledged the fact that within 3.5 years, Jio has been able to bring in 388 million customers from scratch, which changes everything.
Facebook said, “…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 founder Mark Zuckerberg also annonced this mega-deal via a Facebook post.
While Morgan Stanley acted as a financial advisor for this mega deal, AZB & Partners and Davis Polk & Wardwell were counsels advised on the transaction.
Facebook-Jio Mega Deal: 3 Things Which Can Happen Now
Massive Digital Transformation
Both Facebook and Jio are right now positioned at the cusp of a massive digital transformation, and by joining their forces, they have made it sure that this transformation is even bigger.
As per reports coming in, both Facebook and Jio now aims to target more than 60 million micro, small and medium businesses across India, 120 million farmers and 30 million small merchants with cutting edge digital tools and applications.
They both will collectively attempt to cover the population which hasnt been able to use Internet till now, and provide them with a platform for a massive digital revolution.
Both Facebook and Jio are developing a super app, which will cover gaming, online tickets, ecommerce and more.
Focus On JioMart & Ecommerce Expansion
Reliance Jio, since long, has set their eyes on the tremendous market potential of ecommerce and online sales of groceries in India.
Their JioMart app, a revolutionary concept combining offline and online retail is about to get a full-fledged launch across India, after successful testing in cities like Mumbai and Ahmedabad.
Now, with Facebook as their partner, Reliance can aim for a big, unprecedented launch of their JioMart app.
Whatsapp, which is owned by Facebook, has 40 crore users in India, while Facebook has 35 crore users.
Hence, in a way, Reliance can now directly target 40-50 crore Internet users in India, who are active on Facebook and Whatsapp.
Its a gamechanger move, which can change ecommerce forever in India.
TikTok Challenge Gets Serious
Several times over the last few months, Facebook has emphasized that TikTok, the viral short video app is their biggest competitor in India now.
With Jio’s 38 crore users in their fold, Facebook can aim to create a massive, popular short video platform which can fight TikTok, and cement their position in this niche.
It would be interesting to observe, how this mega-partnership between Facebook and Jio materialises from here.
We will keep you updated, as more details come in.