Google is in advanced talks to buy a $4 billion stake in Indian billionaire Mukesh Ambani’s technology venture, people familiar with the matter said, seeking to join rival Facebook Inc in chasing 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 the people.
Jio is at the center of the Indian tycoon’s ambition to transform his energy conglomerate into a homegrown technology behemoth akin to China’s Alibaba Group Group Holding Ltd .The venture has turned into a magnet for Silicon Valley investors, attracting almost $16 billion from Facebook to KKR & Co. in the past three months.
Should the talks with Google result in a deal, that would further burnish Jio’s credentials in its push to upend online retail, content streaming, digital payments, education and health care in a market of more than a billion people.
Trade war politics have all but eliminated Google’s odds of 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’s also a country where Google has made headway in more nascent efforts, such as payments and health care.
Chetan Sharma, a tech industry consultant, 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 payments efforts in the country, he added.
Telecom giants are turning to cloud-computing for their next wave of expansion. As a provider, Google has lagged behind competitors in this growing sector, Sharma said. “Google has been more reactive than proactive,” he said. “This gives them a leg in.”
Last year, Reliance entered a 10-year deal with Microsoft Corp. for cloud services. The announcement did not describe the partnership as exclusive, and Google’s cloud strategy has centered on offering businesses ways to spend across multiple providers.
An arm of Qualcomm Inc. is the latest in 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% of Jio, valuing the venture at $65 billion.
Google invests widely in companies, through its venture capital units as well as off its own balance sheet. A $4 billion investment would be the largest Google has made in a company outside of the U.S.
Here’s a list of confirmed investors in Jio Platforms:
|Qualcomm||Up to $97 million||0.15%||July 12|
|Intel||$253 million||0.39%||July 3|
|Saudi PIF||$1.5 billion||2.32%||June 18|
|L Catterton||$252 million||0.39%||June 13|
|TPG Capital||$600 million||0.93%||June 13|
|ADIA||$752 million||1.16%||June 7|
|Mubadala||$1.2 billion||1.85%||June 5|
|KKR||$1.5 billion||2.32%||May 22|
|$873 million||1.34%||May 17|
|Vista||$1.5 billion||2.32%||May 8|
|Silver Lake||$1.35 billion||2.08%||
May 4 &
|$5.7 billion||9.99%||April 22|
Details of the potential deal with Google could change, and negotiations could still be delayed or fall apart, the people said. Reliance’s representatives didn’t immediately respond to requests for comment. A spokeswoman for Google in California declined to comment on Tuesday.
The string of investments in Jio has spurred a rally in the shares of parent Reliance. The stock has more than doubled from its March 23 low, rewarding investors who will get to hear Ambani, 63, lay out his road map for the future of the group at the conglomerate’s annual shareholders meeting on Wednesday.