InvestorQ : What exactly is the Facebook deal with Reliance Industries all about and who benefits from the deal?
Anjana Aiyar made post

What exactly is the Facebook deal with Reliance Industries all about and who benefits from the deal?

Answer
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Arya Nanda answered.
5 months ago


Typically, as in any stake acquisition deal, both the parties should benefit from the deal. Here is how the deal looks like at this point of time. Facebook announced its investment of $5.7 billion into Reliance Platforms (owner of digital assets of Reliance) for a 9.99% stake. This is the biggest minority interest FDI into India in dollar terms. As per the terms of the deal, Facebook will invest $5.7 billion into Reliance Platforms; which is a subsidiary of Reliance Industries and owns telecom and digital properties of the group. This assigns a value of $57 billion to the digital business alone. This deal will also entail better product sync between Facebook and Reliance. Facebook needs a local platform to ride on and Reliance Digital with its 38 crore client base is best equipped to give them the platform. For Reliance, this is the best way to get a valuation for its digital business and also use the money to defray the huge debt.