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Thakur, a former telecommunications rain producer at NM-Rothschild-y-Morgan Stanley, who became head of strategy and planning at Reliance, had been on the phone since 4 a.m., fine-tuning the final set of documents hours before Facebook to announce its strategic $ 5.7. 1 billion partners with Reliance early Wednesday morning.
A sultry Mumbai night, coupled with the thrill of bringing home a deal that has been in the works for over a year, made it just as difficult to completely disconnect in the past few hours. And this was by far the highest-profile deal of Thakur’s career. The fact that it was baking in the midst of a global pandemic had increased the complexity.
And truth be told, Corona had stumbled on the plans. Well almost.
Meet at Menlo Park Stands canceled
Thakur would travel to the Facebook headquarters in Menlo Park along with his bankers, lawyers and colleagues on March 16 to begin a crucial negotiation with his Facebook counterpart Raj Singh after the non-binding term sheet was signed in January.
A secret code name, Project Redwood, was also conjured for the core team of around 30, perhaps in tune with their deep California connection. Like Sycamore, Sequoia or Oregon Ash, Box, and White Adler, Redwood is a popular tree in California, home to Facebook.
The Silicon Valley poster boy last September had also expanded his corporate home by spending $ 1 billion with a sleek new 525,000-square-foot building called MPK 21, which was designed by architect Frank Gehry to seat about 3,000 employees. The redwood forest in a courtyard and the 3.6-acre rooftop garden along with a tiered outdoor amphitheater similar to a botanical garden had impressed deep resonance for many.
But suddenly the world was locked up. The skies were closing, the borders sealed. The dreaded pandemic was everywhere.
Until then it was relatively smooth. Legal and tax due diligence had begun in February through February under the watchful eye of K Raja Ramachandran, a veteran of RIL. Trade agreement was completed earlier. By then, attorneys — AZB and Davis Poke for Reliance, Shardul Amarchand Mangaldas and Hogan Lovells for Facebook had joined PWC tax auditors and the two top bankers Morgan Stanley and Bank of America Merrill Lynch.
Reliance and its advisers at Morgan Stanley, led by Michael Grimes, its global co-director technology investment bank, had opened the data room around the second week of March. From India, the telecommunications, media technology banker Kamal Yadav acted as the benchmark on the ground, but a face-to-face meeting was absolutely essential “to connect the dots and cross the shirts.”
Thakur did not speak to ET for this story, which was reconstructed after speaking to at least half a dozen people who were directly involved.
A virtual Redwood project
The sudden shutdown threw everything out of place. “Only the VCs were the way out,” said an official involved. The first “virtual meeting” after the aborted March meeting took place around the weekend before Prime Minister Modi announced a national shutdown on March 25.
“The goal was to make the announcement before March 31.” joked another insider deal. “That did not happen, but we are not far away either.”
Trust also needed good news. For seven years, President Mukesh Ambani had been on a $ 100 billion spending wave expanding petrochemicals and building the world’s largest 4G telecommunications network. But a bloated balance was turning into a headache. A deal with Aramco has yet to be suspended, as has its $ 8 billion BrookIT InvIT transaction.
A new technology partner for Jio to take advantage of the retail and commerce that Reliance was waiting to break the bank was the correct medication the doctor had prescribed.
Preliminary discussions with Google were also held, but the search giant wanted thicker commerce and higher rights. It fell off at first.
Zoom Calls and Blue Jeans
What followed were weeks of intense video conferencing through Blue Jeans and Zoom, despite the time difference between Mumbai and California.
“Manoj Modi would only come to complete the great strategic problems. Even on the Facebook side, they would circle Zuk (Zukerberg), ”said another official. “Once around 8 a.m. IST and again around 9 p.m. IST, we would regroup to overcome the heart of the matter,” settlement team officials said. “The afternoons would be relatively free or they would end up with pending problems.”
Even then, uncertainties about the global macro image loomed ominously in the background. Facebook was convinced of the long-term strategic adjustment, but “suddenly, the valuation discussions also included the impact of the blockade on business, the response times that would happen if the blockade continues,” added another official.
Dynamics of distribution
Morgan Stanley had entered the scene in the second half of last year having lost Aramco’s tenure. The Wall Street bank had advised Sony last year when Zee Entertainment was up for grabs. That deal fell apart but Morgan got Sony to speak to Reliance to merge the entertainment business as well. That agreement is also in the last laps.
But sources say Mukesh Ambani and Mark Zukerberg had initially toyed with the idea of a collaboration almost 14 months ago. Gen Next Akash and Manoj Modi, Mukesh’s consigliere, were also part of Team A to lead the dialogue. The appointment of Ajit Mohan as MD and Head of Country in India added weight to his presence and reaffirmed the commitment.
“No one would blame us anymore for not investing enough dollars in India,” one official joked. “This check should silence many.”
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