Facebook’s $5.7B Investment in Reliance Jio Platforms

By Christopher Shim, Karthik Neelamegam (University of Cambridge), Samuli Karjalainen, Jonathan Fuchs, Chiara Fulvi (London School of Economics)

 

Overview of the deal


Acquirer: Facebook

Target: Jio Platforms

Implied EV: $65.95B

Total Transaction Size: $5.7B

Announced Date: 22.04.2020

The social media and technology giant Facebook recently announced it would take a minority stake in India’s Reliance Jio Platforms, the country’s biggest telecom operator. Mark Zuckerberg’s Facebook will invest $5.7B for a 9.99% stake in Jio Platforms, which is the digital technology subsidiary of Indian billionaire Mukesh Ambani’s Reliance Industries. Prior to the deal the subsidiary was referred to as “Reliance Jio”, whereas now Reliance Industries refers to it as “Jio Platforms” in order to allude to the range of services offered by the subsidiary besides telecoms. Other services under the Jio-umbrella include JioVaan, a music streaming service, the on-demand TV service JioTV, payments service JioPay, and JioMart, an e-commerce business and joint venture between India’s largest retail chain Reliance Retail and Jio. Facebook aims to benefit from Jio Platform’s 388m users, especially through a tie-up of JioMart and Facebook’s WhatsApp messaging service, which counts India as its biggest market with more than 400m users.


“We can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience” - Ajit Mohan, VP and Managing Director of Facebook India

Company Details: Facebook, Inc.


Facebook, Inc. is a technology conglomerate that develops products that enable people to connect virtually. The company's products include Facebook, Instagram, Messenger, and WhatsApp. It also provides Oculus, a hardware, software, and developer ecosystem, which allows people to connect with each other through its Oculus virtual reality products.

Founded in: 2004

Headquartered in: Menlo Park, US

CEO: Mark Zuckerberg

Number of employees: 48,268

Market cap: $680.34 Billion

EV: $622.27 Billion

LTM Revenue: $73.36 Billion

LTM EBITDA: $33.38 Billion

LTM EV/Revenue: 8.48x

LTM EV/EBITDA: 18.64x


Company Details: Reliance Industries Ltd

Reliance Industries Limited is an Indian multinational conglomerate. It engages in petroleum refining and marketing, petrochemicals, energy retail, textile, and telecommunications businesses worldwide. Reliance is the largest publicly traded company in India and operates 10,415 retail stores. In the TMT industry, its activities include Jio 4G wireless broadband network services, various television channels, feature films, news and entertainment portals, finance portals, lifestyle portals, content syndication, and online ticket booking platforms.

Founded in: 1973

Headquartered in: Mumbai, India

CEO: Mukesh Dhirubhai Ambani