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A crack team led by chairman Mukesh Ambani’s son Akash and trusted aide Manoj Modi, RIL veteran, were in the forefront of negotiations that resulted in the $5.6 billion investment in Reliance Jio by Facebook—a deal closed determinedly in the face of headwinds from the coronavirus pandemic.

According to two people directly aware of the internal deliberations, it was Akash Ambani who led the discussions, travelling several times to the US, where Facebook is headquartered, to steer the conversation.

According to these people, the Facebook investment in RIL’s Jio Platforms was the outcome 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 nuts and bolts of the transaction were hammered out and negotiated by a team which, apart from Akash Ambani and Modi, also included Anshuman Thakur, strategy head at Jio and Pankaj Pawar, group president, supply chain. Together they ensured that the deal sailed through even as the covid-19 pandemic ravaged stock markets and disrupted global economies, the people cited above said.

“The origins of this transaction lie in the fact that Mukesh Ambani has always viewed Jio as a digital platform and not just a mobile network. That’s how they have designed it, that’s how they have built it. There was always this thought process that at some point they will go out and seek a partner, and it was never about the cheque size. You can get many people to write a cheque, but it was about getting on board someone who can contribute to the business and help take the broader story forward," said the first of the two people cited above, requesting anonymity.

It was not a typical banker-run process where you line up many potential bidders, he added.

“They have known each for a while and they have been talking about collaboration for well over a year. While there were numerous meetings between Mukesh Ambani and Zuckerberg, on a day-to-day basis, it was driven by the Facebook finance and business teams and at the Reliance end, it was Akash, Manoj Modi, Pankaj and Anshuman," the person said.

Mukesh Ambani and RIL veteran Manoj Modi (R)
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Mukesh Ambani and RIL veteran Manoj Modi (R)

While the deal took a slight pause due to the worldwide disruptions caused by the pandemic, the strategic importance of the partnership for both Facebook and Reliance ensured it was not allowed to be derailed by near-term headwinds.

“They (Facebook) had to think in great detail what the implications will be. Covid-19 will of course have a material impact—maybe next six months or the whole fiscal. But, ultimately speaking, you are looking to do the partnership not for the next six months or twelve months. This is not a pre-IPO financial investment. This is a strategic stake. The bulk of the value comes from what you will build over the next 5 to 10 years and not what happens over the next 12-18 months," said the second person, who also spoke on the condition of anonymity.

There are several growth avenues that convinced them about the potential of this investment and that’s why it made sense to go ahead with it, he added. “They looked at the growth on the mobile services side; the potential growth of Jio home fibre; they have started rolling out enterprise services as well and then there is the growth that will come from the app universe as users graduate towards premium versions," the second person said.

Despite these huge stakes involved, the transaction did not go off the rails over disagreements on valuations. “There was no crazy disconnect on the valuation at any point of time. It was within a reasonable range," the first person said. “It is testament to the quality of the business that Jio has built and the trust and the belief in the partnership and what they can achieve together."

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