Competition Commission of India has approved Facebook's acquisition of 9.99 per cent stake in Jio Platforms, the digital subsidiary of Mukesh Ambani-led Reliance Industries.
"@CCI_India approves acquisition of 9.99% stake in Jio Platforms by Jaadhu Holdings LLC," the antitrust watchdog posted in a tweet on Wednesday.
The investment worth Rs 43,574 crore by Facebook for 9.99 per cent stake in Jio Platforms was the first in a series of 11 deals secured by Reliance Industries' digital arm. The social media giant had executed this deal via its subsidiary Jaadhu Holdings. Announced on April 22, the deal makes Mark Zuckerberg's Facebook the largest minority shareholder in Reliance Industries.
@CCI_India approves acquisition of 9.99% stake in Jio Platforms by Jaadhu Holdings LLC.— CCI (@CCI_India) June 24, 2020
The investment valued Jio Platforms Limited (JPL) at a record Rs 4.6 lakh crore. This will catapult Reliance's digital platform as the fifth largest firm, considering market capitalisation of listed companies in India, behind its parent Reliance Industries (RIL), TCS, HDFC Bank and Hindustan Unilever (HUL).
Reliance is looking to benefit from the digital expertise of Facebook in transforming Jio Platforms into a full-fledged digital platform from its telecom background. The deal is likely to give boost to RIL's JioMart project. For instance, with JioMart, Jio's small business initiative, and WhatsApp together, customers will be able connect with businesses and ultimately purchase products in a seamless mobile experience. Meanwhile, the Facebook deal and subsequent investments has helped Reliance become a net-debt zero company in a span of nine weeks.
It will also help Facebook increase its penetration in India, its most important market in the world. WhatsApp, the instant messaging application owned by Facebook, alone has more than 400 million users in India.