Facebook In Talks To Buy Stake In Reliance Jio: Report
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Social networking giant Facebook is in talks to buy a multi-billion stake in Indian conglomerate Reliance’s telecommunications arm Jio, The Financial Times reported on Tuesday, citing two people familiar with the matter.
According to the report, the Menlo Park, California-based company is close to signing a preliminary deal for a 10 per cent share in the telecom company that disrupted how India uses the internet by providing access to cheap data and smartphones. The timetable of the deal has been affected by global lockdowns due to the coronavirus disease outbreak.
Jio has managed to garner a whopping 370 million subscribers since its 2016 launch and the potential deal will give Facebook, which owns messaging service WhatsApp, greater and deeper access into what continues to be an untapped market with millions of new smartphone users.
WhatsApp recently announced that it had 2 billion users across the globe and according to earlier disclosures, has more than 400 million users in India alone. Last year, India overtook the United States to become the second largest smartphone market in the world, behind only China.
Various reports have put Jio’s valuation at $60-$70 billion.
The FT report added that tech giant Google has also been in separate discussions with Jio.
Reliance has been steadily trying to sell assets as it targets to cut down all the debt it has accumulated over the last few years by the end of fiscal 2021. At the end of the last fiscal year, the company had a net debt of about $22 billion.
Chairman Mukesh Ambani laid out the plans to be net-debt free at the company’s annual general meeting last year, and has since announced deals with Saudi Aramco to sell a 20 per cent stake in its oil and chemicals business, and with London-headquartered BP to sell a 49 per cent stake in its petrol pumps and aviation fuel business.
Earlier, it sold its tower infrastructure business to Canada’s Brookfield Infrastructure Partners for about INR 25,000 crore. Ambani has also said there are plans to list Jio as a separate company.
Shares of Reliance Industries on the National Stock Exchange were up 20 per cent at the time of publication.