Competition Commission approves Facebook-Jio deal worth $5.7 billion

Jaadhu Holdings, LLC is an indirect wholly owned subsidiary of Facebook, Inc. through which it acquired the 9.9 per cent stake in Reliance's Jio

The Competition Commission of India (CCI) on Wednesday approved Facebook’s Rs 43,574 crore ($5.7 billion) investment in Jio Platforms, the digital arm of Reliance Industries.

“@CCI_India approves acquisition of 9.99 per cent stake in Jio Platforms by Jaadhu Holdings LLC,” the CCI tweeted on Wednesday. 

Jaadhu Holdings, which is an indirect wholly-owned subsidiary of Facebook, acquired 9.9 per cent stake in Jio. The deal was announced in April. The deal would bring together JioMart, the e-commerce venture of Mukesh Ambani, and Facebook’s WhatsApp platform to connect consumers with neighbourhood kirana stores. The anti-trust regulator sees if there is a business overlap between two parties and whether this can lead to an appreciable adverse effect on competition. It also examines closely if the acquirer has secured control over management and operations of the other company. 

As a part of the deal, Facebook will get one board seat and one observer seat on board without any voting rights thus giving it a limited role in steering Jio operations, competition lawyers say. 

Business Standard reported on Wednesday that Facebook has sought legal advice pertaining to India’s new foreign direct investment policy towards neighbouring countries, particularly China and Hong Kong. 

While the social media giant is founded and headquartered in the US, being a public-listed company it has investment from several funds based out of China and Hong Kong.