Business News›Internet›Facebook floats new entity to acquire 9.99% stake in Jio Platforms
Facebook floats new entity to acquire 9.99% stake in Jio Platforms
ETtech Last Updated: Jun 03, 2020, 12:20 PM IST
The two companies told CCI the proposed transaction does not alter the competitive landscape & they would continue to operate independently.
Social media giant Facebook has floated a new entity -- Jaadhu Holdings LLC – incorporated in Delaware in the United States, which will acquire 9.99% stake in Jio Platforms Ltd.
The two companies disclosed this in a submission to India's competition watchdog, seeking clearance for the $5.7 billion deal that was announced in April.
The Facebook entity will acquire a minority, non-controlling share in Jio Platforms, according to the submission to the Competition Commission of India.
Jio Platforms, Facebook-owned instant messaging service WhatsApp Inc and Reliance Retail Ltd will also enter into a separate commercial agreement, it added.
"Jaadhu is an indirect wholly owned subsidiary of Facebook. Jaadhu is a newly incorporated company formed in March 2020... As on the date of the Notification Form, Jaadhu is not engaged in any business in India or anywhere in the world," it said.
Read: How Facebook is logging into the Reliance Jio ecosystem
The Reliance Industries company and Facebook told the Commission that the proposed transaction does not alter the competitive landscape and that Facebook and Jio Platforms would continue to operate independently.
"The Proposed Transaction and the Proposed Commercial Arrangement are pro-competitive, benefits consumers, Kirana (corner) stores and other small and micro local Indian businesses, and take forward the vision of digital India," the filing read.
There is also no significant overlap between the two business segments that Facebook and Jio Platforms operate in - advertising services and consumer communication applications, respectively, it said.
Since the announcement of Facebook's investment in Jio Platforms, the subsidiary of Mukesh Ambani-led Reliance Industries has raised a further Rs 34,988 crore from PE firms KKR, Vista Equity Partners, General Atlantic and Silver Lake, at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore.
Read: Abu Dhabi Investment Authority in talks to invest in Jio platforms
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