(Bloomberg) – Google is in advanced talks to buy a $ 4 billion stake in Indian billionaire Mukesh Ambani’s tech company, people familiar with the matter said, seeking to join rival Facebook Inc. to pursue growth in a promising Internet and e-commerce market. .
The Mountain View, California-based company has been discussing the investment in Jio Platforms Ltd., the digital arm of Ambani’s Reliance Industries Ltd., the people said, asking not to be identified because the information is private. An announcement could come as soon as the next few weeks, according to people.
Jio is at the center of the Indian magnate’s ambition to transform his energy conglomerate into a local tech giant similar to China’s Alibaba Group Holding Ltd. The company has become a magnet for Silicon Valley investors, attracting nearly $ 16 billion. from Facebook to KKR & Co In the last three months.
If the talks with Google result in a deal, that would further polish Jio’s credentials in his bid to change online retail, content streaming, digital payments, education and healthcare in a market of more than a billion people.
Global technology leaders, from Facebook to Intel Corp., are looking for multiple ways to get a slice of the Indian market, where millions of Internet users are added for the first time each month. With almost 400 million customers over its wireless network, Jio Platforms offers the largest user base that increasingly purchases consumer products online and downloads music and videos, using cheap smartphones and the data services themselves. at a reduced price from Jio.
Trade war policy has eliminated the chances of Google returning to China. That leaves India as one of the remaining large digital markets where Google’s key business lines, Search and YouTube, have room to grow. It is also a country where Google has made progress in more nascent efforts, such as payments and healthcare.
Chetan Sharma, a consultant to the tech industry, said cloud computing is the main reason Google is investing in Jio. The move would also support Google’s Android smartphone operating system and its mobile payment efforts in the country, he added.
The telecommunications giants are turning to cloud computing for their next wave of expansion. As a provider, Google has lagged behind the competition in this growing sector, Sharma said. “Google has been more reactive than proactive,” he said. “This gives them an opportunity.”
Last year, Reliance signed a 10-year contract with Microsoft Corp. for cloud services. The announcement did not describe the partnership as exclusive, and Google’s cloud strategy has focused on offering businesses ways to spend on multiple providers.
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An arm of Qualcomm Inc. is the latest on Jio’s growing list of high-profile investors, which also includes Intel Capital, Silver Lake Partners and Mubadala Investment Co. As of July 12, Reliance had sold 25.2%. de Jio, valuing the company at $ 65 billion.
Google invests extensively in companies, through its venture capital units, as well as outside its own balance sheet. An investment of $ 4 billion would be the largest Google has ever made in a company outside of the U.S.
Here is a list of confirmed investors on Jio Platforms:
Details of the possible Google deal could change, and negotiations could still be delayed or crumbled, the people said. Reliance representatives did not immediately respond to requests for comment. A Google spokeswoman in California declined to comment Tuesday.
The Jio investment chain has spurred a rebound in parent company Reliance. The stock has more than doubled from its March 23 low, rewarding investors who will listen to Ambani, 63, setting out his roadmap for the group’s future at the conglomerate’s annual shareholder meeting on Wednesday.
The increase in shares has also helped Ambani, the richest man in Asia, enter the exclusive club of the 10 richest people in the world. With a net worth of $ 72.4 billion, according to the Bloomberg Billionaires Index, the titan has surpassed Elon Musk, Google co-founders Larry Page and Sergey Brin, as well as legendary investor Warren Buffett in recent days to become at the sixth on the list.
Like Facebook, Google is expanding its presence in the Indian market. On Monday, the company said it plans to spend $ 10 billion over the next five to seven years to help accelerate the adoption of digital technologies in the country. The amount could be used for partnerships and capital investments, among others, he said.
Sundar Pichai, who was born in the country and is now CEO of Alphabet Inc., Google’s parent, said the coronavirus outbreak has made clear the importance of technology for doing business and connecting with friends and family.
Founded in 1998 in Silicon Valley, Google entered India six years later with offices in Bangalore and Hyderabad. Since then, the Indian business has become one of the most important in the company. The country now has more than 500 million internet users, second only to China, with growth that has proven to be attractive to a host of American tech giants.
Over the past decade, Google has successfully launched several products in India, including a Saathi Internet service to bring rural women online and its Google Pay service.
(Updates with Google’s strategy in the sixth paragraph).
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