|Staff Reporter |||Apr 23, 2020 05:06 PM EDT|
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Social media giant Facebook has just made its largest deal since it purchased WhatsApp back in 2014. The company announced that it will be investing $5.7 billion in the companies owned by Asia's richest man, Mukesh Ambani.
The investment will include Facebook acquiring a 10 percent stake in Ambani's telecommunications company Reliance Jio Infocomm Limited. The acquisition will make Facebook the Indian firm's largest minority shareholder. Facebook is particularly interested in the company's e-commerce venture, JioMart, which it plans to integrate with its WhatsApp platform.
Jio Infocomm, which only appeared on the Indian market just four years ago, is currently one of the country's largest wireless providers. With the backing of Ambani's resources, the company quickly rose to dominance by undercutting rivals with attractive promotions such as free wireless mobile plans.
Following the announcement made by Ambani's Reliance Industries on Wednesday, the company's stock prices surged y more than 10 percent in Mumbai. The surge in the stock helped Ambani reclaim the title of Asia's richest man from Alibaba Group Holding founder Jack Ma.
Ambani has been slowly growing his company's presence in the lucrative e-commerce space, launching a wholly-owned online retail unit called Jio Platforms. The company joins together Relaince's online ecosystem, which includes its online application, wireless platform, and e-commerce business. According to the Mumbai-based company, Jio Platforms currently has a pre-money enterprise value of around $66 billion.
Facebook's deal with Ambani's companies will allow the social media giant to expand its reach in the world's fastest-growing online market. Facebook is looking to tap into the country's rapidly growing online users, most of which are rapidly adapting to technologies such as online payment and e-commerce.
India currently has an estimated half a billion internet users, making it one of the most attractive markets for tech and e-commerce companies. Major players such as Amazon, Microsoft, Google, and Apple have made billions of dollars in investments in India in an attempt to secure market share.
In a video posted on Facebook, Mark Zuckerberg stated that India is a particularly special place for the company. He added that Facebook is committed to working together with local partners to tap into the massive commerce opportunities in the country.
On the other hand, Ambani's partnership with Facebook will likely bode well in aiding the billionaire to achieve his ambitions. The businessman has managed to remake his family's energy conglomerate into what will likely be India's first e-commerce giant.
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