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A crack team led by President Mukesh Ambani’s son Akash, and trusted aide Manoj Modi, CEO of Reliance Retail, were at the forefront of negotiations that resulted in the $ 5.6 billion investment in Reliance Jio. by Facebook, a decidedly closed deal against winds against the coronavirus pandemic.
According to two people directly aware of the internal deliberations, it was Akash Ambani who led the discussions, traveling several times to the US. USA, where it is headquartered on Facebook, to lead the conversation.
According to these people, Facebook’s investment in RIL’s Jio platforms was the result of a meeting of minds between the leaders of the two groups, Mukesh Ambani and Mark Zuckerberg, who also met in person in the run-up to the closing of the deal. . .
But the basics of the transaction were drawn up and negotiated by a team that, in addition to Akash Ambani and Modi, also included Anshuman Thakur, Jio’s chief strategy officer, and Pankaj Pawar, group president, supply chain. Together they made sure the deal came to fruition even as the Covid-19 pandemic devastated stock markets and disrupted world economies, the people quoted above said.
“The origin of this transaction lies in the fact that Mukesh Ambani has always seen Jio as a digital platform and not just as a mobile network. That’s how they designed it, that’s how they built it. There was always this thought process that at some point they would go looking for a partner, and it was never about the size of the check. It can get many people to write a check, but it was about getting someone who can contribute to the business and help carry the bigger story, “said the first of the two people named above, requesting anonymity.
He added that it was not a typical bank-run process where many potential bidders line up.
“They have known each other for a while and have been talking about collaboration for more than a year. While there were numerous meetings between Mukesh Ambani and Zuckerberg, on a day-to-day basis, it was driven by Facebook’s business and finance teams and, at the end of Reliance, it was Akash, Manoj Modi, Pankaj and Anshuman, “the person said.
While the deal came to a slight halt due to global disruptions caused by the pandemic, the association’s strategic importance to both Facebook and Reliance ensured that it was not derailed by headwinds in the short term.
“They (Facebook) had to think in great detail about what the implications would be. Covid-19, of course, will have a material impact, perhaps the next six months or the entire fiscal year. But ultimately, you are looking to make the partnership not for the next six or twelve months. This is not a pre-IP financial investment. This is a strategic bet. Most of the value comes from what it will build in the next 5 to 10 years and not from what happens in the next 12-18 months, “said the second person, who also spoke on condition of anonymity.
There are several avenues of growth that convinced them about the potential of this investment and that is why it made sense to go ahead, he added. “They saw growth on the mobile services side; the potential growth of Jio’s home fiber; They also started implementing business services and then there is the growth that will come from the application universe as users graduate to premium versions, “said the second person.
Despite these huge bets involved, the transaction didn’t go out of the way because of disagreements over valuations. “There was no crazy disconnect in the valuation at any time. It was within a reasonable range, “said the first person.” It is a testament to the quality of the business that Jio has built and the trust and belief in the partnership and what they can achieve together. “
