Facebook picks up 10% stake in Jio Platform for Rs 43,574 crore
New Delhi: Facebook on Wednesday announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in the firm that houses billionaire Mukesh Ambani's telecom arm Jio as the social media giant looks to expand presence in its largest market in terms of subscriber base.
"Today we are announcing a USD 5.7 billion, or Rs 43,574 crore, investment in Jio Platforms Ltd, part of Reliance Industries Ltd, making Facebook its largest minority shareholder," the company said in a statement.
Reliance in a separate statement said the investment by Facebook values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value (USD 65.95 billion, assuming a conversion rate of Rs 70 to a US dollar).
"Facebook's investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis," it said.
Jio Platforms, a wholly-owned subsidiary of Reliance Industries Ltd (RIL), houses digital services of the group. Reliance Jio Infocomm Ltd, with 388 million subscribers, is a wholly-owned subsidiary of Jio Platforms.
The Facebook deal is part of value unlocking by RIL to cut debt. RIL has been seeking strategic partnerships across its businesses while targeting to deleverage its balance sheet.
It has been talking to Saudi Aramco for sale of a 20 per cent stake in its oil-to-chemical business for an asking of USD 15 billion. RIL has already tied up with BP Plc for fuel business as it targets to have a debt-free status by next year.
Jio had also been reportedly talking separately to Google but the fate of those discussions is not known.
The latest deal is a win-win for both Facebook and Jio. It would give Facebook deeper access to India, the second largest internet market after China.
Facebook already has 400-plus million Whatsapp users in India and is looking to launch a payment offering. Having a local partner could help it in navigating various regulatory issues, including those related to privacy and local storage.
Also, having a good telecom partner could help Facebook improve its reach to masses.
From an RIL perspective, it could leverage on Facebook's technology expertise and talent pool as well as help in its ambitions to make Jio a digital company. This apart, the deal would aid the company achieving zero debt status by March 2021.
Since launching Jio in 2016, RIL has emerged as the only Indian company capable of competing with US tech groups in the fast-growing Indian market, expanding from mobile telecom into everything from home broadband to e-commerce.
Jio has emerged as the number one telecom operator in India, both in terms of traffic as well as revenue in a virtual two-player market since the third player, Vodafone-Idea is struggling under regulatory burden. Jio's main competitor is Bharti Airtel.
Facebook said the investment "underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country".
"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," it added.
Together with WhatsApp and Instagram, Facebook overall is estimated to have more users in India than any other single country.
The number of internet users in India is projected to rise to about 850 million in 2022, according to consultancy PwC, up from 450 million in 2017.
"The partnership between Facebook and Jio is unprecedented in many ways. This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India," RIL said.
"The investment values Jio Platforms amongst the top 5 listed companies in India by market capitalisation, within just three-and-a-half years of launch of commercial services, validating RIL's capability in incubating and building disruptive next-generation businesses, while delivering market defining shareholder value," the statement said.
RIL said that concurrent with the investment, Jio Platforms, Reliance Retail Ltd and WhatsApp have also entered into a commercial partnership agreement. This is to further accelerate Reliance Retail's new commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp.
JioMart provides consumer access to the nearest small merchant and kirana shops.
Commenting on the partnership with Facebook, RIL Chairman and Managin Director Mukesh Ambani said, "when Reliance launched Jio in 2016, we were driven by the dream of India's Digital Sarvodaya India's Inclusive Digital Rise to improve the quality of life of every single Indian and to propel India as the world's leading Digital Society".
The synergy between Jio and Facebook will help realise the goal of 'Digital India', he said. "In the post-corona era, I am confident of India's economic recovery and resurgence in the shortest period of time," he added.
The transaction, RIL said, is subject to regulatory and other customary approvals.
Morgan Stanley as a financial advisor and AZB & Partners and Davis Polk & Wardwell as counsels advised RIL on the transaction.
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London, Nov 22: A bomb disposal squad deployed as a “precaution” to the South Terminal of Gatwick Airport concluded an investigation into a "security incident" on Friday after making a “suspect package” safe.
The South Terminal of Gatwick Airport, the UK's second busiest airport after Heathrow, which was briefly shut owing to the incident reopened following the incident.
The Gatwick is around 45 km south of London.
Two people detained during the enquiries have since been allowed to continue their journey as the airport was opened.
“Police have concluded their investigation into a report of a suspect package at Gatwick Airport. Officers from the EOD (Explosive Ordnance Disposal) team made the package safe, and the airport has been handed back to its operator,” Sussex Police said in an updated statement.
“Two people detained while enquiries were ongoing have subsequently been allowed to continue their journeys. There will remain an increased police presence in the area to assist with passengers accessing the South Terminal for onward travel,” the statement added.
Earlier on Friday, the incident caused severe disruption at the busy airport’s South Terminal, while the North Terminal of Gatwick Airport remained unaffected.
“Police were called to the South Terminal at Gatwick Airport at 8.20 am on Friday (November 22) following the discovery of a suspected prohibited item in luggage,” a Sussex Police statement said.
“To ensure the safety of the public, staff and other airport users, a security cordon has been put in place whilst the matter is dealt with. As a precaution, an EOD (Explosive Ordnance Disposal) team is being deployed to the airport. This is causing significant disruption and some roads around the South Terminal have been closed. We’d advise the public to avoid the area where possible,” it said.
Footage on social media taken outside the airport showed crowds of frustrated travellers being moved away from the terminal building.
Gatwick said it was working hard to resolve the issue.
“A large part of the South Terminal has been evacuated as a precaution while we continue to investigate a security incident," the airport said in a social media post.
“Passengers will not be able to enter the South Terminal while this is ongoing. The safety and security of our passengers and staff remain our top priority. We are working hard to resolve the issue as quickly as possible.”
Train and bus services that serve the airport were also impacted while the police carried out their inquiries.
In an unrelated incident in south London on Friday morning, the US Embassy area in Nine Elms by the River Thames was the scene of a controlled explosion by Scotland Yard dealing with what they believe may have been a “hoax device”.
“We can confirm the 'loud bang' reported in the area a short time ago was a controlled explosion carried out by officers,” the Metropolitan Police said in a post on X.
“Initial indications are that the item was a hoax device. An investigation will now follow. Some cordons will remain in place for the time being but the majority of the police response will now be stood down,” it added.
