AGENCIES, New Delhi: Facebook Inc will pick up about 10% of Jio Platforms, Mukesh Ambani-owned Reliance Industries Ltd’s digital technology arm, for $5.7 billion, both the companies have said.
The US social media company also said the deal would bring together JioMart, an e-commerce venture of Mukesh Ambani, and its WhatsApp platform to enable people to connect with businesses.
The Jio Platforms purchase is Facebook’s biggest since its 2014 acquisition of WhatsApp.
The partnership with Jio would allow Facebook’s Mark Zuckerberg to step up his expansion in India, the second-largest internet market after China, which is rapidly embracing online payment and e-commerce as more people get smartphones.
For Facebook, which already has about 250 million users in India, the deal gets it a well-connected ally in India, where WhatsApp is trying to launch a payments service but has run afoul of regulatory scrutiny over fake news and privacy concerns.
The deal will also help the social media giant leverage WhatsApp to partner with Reliance’s e-commerce marketplace JioMart, that connects small businesses to customers.
While India will be a testing ground for WhatsApp payment services, currently in pilot, Zuckerberg is also separately looking at the market for his crypto-currency project called Libra.
For Mukesh Ambani, the deal with the technology giant comes as a boost at a time when his group is battling the impact of the coronavirus pandemic and a slump in demand for crude oil. He has also been seeking to reassure investors that he will honour a pledge to reduce the group’s net debt to zero.
Working with Facebook would be a boost to the ambitions of Mukesh Ambani, until recently the richest man in Asia, who has been remaking his energy conglomerate as India’s first titan of e-commerce.
The deal will help Reliance cut debt that has piled up in its expensive push to secure top spot for its Jio Infocomm telecom business.