Moneycontrol
Get App
you are here: HomeNewsBusiness
Last Updated : May 04, 2020 11:56 AM IST | Source: Moneycontrol.com

PE giant Silver Lake buys stake in Reliance Jio for Rs 5,655.75 crore, at higher valuation than Facebook deal

The Silver Lake deal takes Jio's enterprise value to Rs 5.15 lakh crore — a 12.5 premium to the value indicated by Facebook, which bought 9.99 percent of the digital unit of RIL


American private equity giant Silver Lake Partners has bought 1 percent of Jio Platforms for Rs 5,655.75 crore ($750 million) in a deal that takes Jio's enterprise value to Rs 5.15 lakh crore — a 12.5 premium to the value indicated by Facebook, which bought 9.99 percent of the digital unit of RIL.

The deal comes less than two weeks after Facebook spent $5.7 billion to buy a 9.99 percent stake in Jio.  The Facebook-Jio deal was the social media network’s biggest since its $22 billion buyout of WhatsApp in 2014.

Silver Lake  shot into prominence after acquiring PC maker Dell Inc along with Michael Dell in 2013. It  is a global leader in technology investing, with over $43 billion in combined assets under management and committed capital and a team of approximately 100 investment and operating professionals located around the world in Silicon Valley, New York, Hong Kong and London.

Close

On April 30, Reliance said, "In addition to the Facebook investment, the Board was informed that RIL has received strong interest from other strategic and financial investors and is in good shape to announce a similar sized investment in the coming months."

On April 22, Facebook bought 9.9 percent stake in Jio Platforms for Rs 43,574 crore. That deal valued Jio at Rs 4.62 lakh crore ($65.95 billion).

Since its launch three years ago, Jio - led by billionaire Mukesh Ambani - has grown at a sprinter’s pace to become India’s largest telecom company. It has accumulated some 340 million customers through a barrage of innovations, including offering cut-throat mobile internet prices and a diverse suite of products and including chat services, movies, games and music.

Also Read: Silver Lake | Here are key things you need to know about the PE fund

The deal will help reduce RIL’s debt burden, which bulged due to the breakneck expansion of Jio and other businesses. Ambani invested around $40 billion to launch Jio in 2016. RIL is also the largest retail player in India thanks to a series of aggressive expansionary moves into consumer-facing businesses such as e-commerce and grocery.

ALSO READ: Here's why Facebook bought stake in Reliance Jio for Rs 43,574 crore
On April 30, Reliance Industries said it will achieve zero net debt status ahead of schedule, as it announced its quarterly and annual results.

In addition to the investment by Facebook, the company said, it has received strong interest from other strategic and financial investors and is in good shape to announce a similar-sized investment in the coming months.

Follow our complete coverage of the Jio Silver Lake coverage here.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Moneycontrol Ready Reckoner
Now that payment deadlines have been relaxed due to COVID-19, the Moneycontrol Ready Reckoner will help keep your date with insurance premiums, tax-saving investments and EMIs, among others.

Get best insights into Options Trading. Webinar by Mr. Vishal B Malkan is Live. Watch Now!

First Published on May 4, 2020 08:31 am