India's Competition Commission (CCI) has approved the $5.7 billion agreement between Facebook and Reliance Industries Limited, even as RIL is trying to finalize its $15 billion agreement with Saudi Aramco, the world's largest oil company.
CCI has given the green light for the acquisition of 9.99 percent stake in Jio Platforms by Jaadhu Holdings LLC, the competition regulator disclosed on Twitter, Wednesday. RIL, Jio Platforms and Facebook Inc. have sealed binding agreements for an investment of ₹43,574 crore by the social media network into Jio Platforms.
In his letter to shareholders, RIL Chairman Mukesh Ambani said the agreement is aimed at fast-tracking India's all-round development, and fulfilling the needs of India's people and its economy.
"The joint focus will be to digitally empower India's 60 million MSMEs, 120 million farmers, 30 million small merchants and millions of SMEs in the informal sector," Ambani said, as reported by The Hindu. Aside from these benefits, the deal will also empower India's people seeking various digital services, the report said.
The deal would bring together Facebook's WhatsApp platform and JioMart, the e-commerce division of Ambani. It will also link consumers with neighborhood kirana stores. The CCI will monitor if there is a business overlap between the two companies and whether the overlap can cause an adverse effect on competition. The CCI will also evaluate if the acquirer has secured control over management and operations of the other company.
The announcement comes just a few days after the Indian regulator disclosed it was accessing the deal for potential misuse of users' information and analyzing if it should consider revising the current policies for some mergers and acquisitions in the nation.
The Facebook deal also comes six months after Reliance Industries reorganized its corporate structure to make the telecom operator free from any debts, which allowed it to set the stage for a share sale.
Jio Platforms, operated by India's most valuable company Reliance Industries, is the largest telecom player in the country with over 388 million clients. The group has secured $15.2 billion from a series of prominent investors, including General Atlantic, Silver Lake, and KKR.
As a part of the agreement, Facebook will get one board and one observer position without any voting rights therefore providing the company a limited function in steering Jio operations, CCI lawyers said.
In July last year, Facebook partnered with Reliance Jio for a digital literacy program dubbed Digital Udaan. The campaign focused on tens of millions of JioPhone users in India, who were new to the internet. The joint project reached 200 areas across 13 states in the country and introduced vernacular users to the fun of mobile connectivity.
