Facebook to Invest $5.7 Billion in Indian Telecom Reliance Jio to Reach Small Indian Stores
BENGALURU—Facebook will buy a 10 percent stake in the digital business of Indias Reliance Industries..
BENGALURU—Facebook will buy a 10 percent stake in the digital business of Indias Reliance Industries for $5.7 billion, as the social media firm looks to leverage its highly popular WhatsApp chat service to offer digital payment services to small businesses in India.
The deal will help the Indian conglomerate cut debt that has piled up in its expensive push to secure top spot for its Jio Infocomm telecom business.
Facebooks investment will make it the largest minority shareholder in Jio Platforms Ltd, Jio said in a statement on Wednesday, putting the enterprise value of the business at around $66 billion. Jio Platforms holds a host of Reliances digital assets including Jio Infocomm.
WhatsApp is trying to secure approval to roll out its digital payment service in India, which will see it compete in a crowded market with the likes of Google Pay and Paytm. The approval to expand beyond the beta launch hasnt come through yet, a Facebook spokesman said.
The messaging service has 400 million users in India, its biggest market, reaching nearly 80 percent of smartphone users in the country. The deal will also help the social media giant leverage WhatsApp to partner with Reliances e-commerce marketplace JioMart, that connects small businesses to customers.
“(India) is in the middle of a major digital transformation and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online,” Facebook founder CEO Mark Zuckerberg said in a post.
For Reliance, whose debt pile swelled to more than $40 billion as of September, the partnership will bring in much needed funds to make good on its promise to cut net debt to zero by March 2021.
Reliance Industries, controlled by billionaire Mukesh Ambani, is also set to sell a fifth of its oil and chemical refining business to Saudi Aramco for roughly $15 billion, and a stake in its telecom tower assets to Canadian privatRead More – Source
