(Bloomberg) -- Reliance Industries Ltd. will spend 52.3 billion rupees ($710 million) to acquire controlling stakes in two cable TV operators to help it accelerate plans to connect 50 million households with high-speed Internet in the world's second-most populated nation.
The company led by billionaire Mukesh Ambani will purchase a 51.3 percent stake in Hathway Cable and Datacom Ltd. and 66 percent shares of Den Networks Ltd., Reliance said in a statement on Wednesday. The company said its digital push will help improve India's global rank from 135th to among the top-3 countries in the world for wireline digital connectivity.
The twin acquisitions will help unit Reliance Jio Infocomm Ltd. bolster its presence in India's fragmented cable and broadband fiber market. Ambani, Asia's richest man, in July unveiled plans to roll-out Internet connectivity to homes, merchants and businesses of all sizes simultaneously across 1,100 cities. JioGigaFiber, as the new service is called, will come with routers and a set-top box for television, he said.
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Den Networks rose 1.8 percent, while Hathway dropped 3 percent before Reliance announced the acquisitions. Reliance Jio on Wednesday also reported a net income of 6.81 billion rupees. The unit added 37 million new users during the quarter, with average revenue per user falling to 131.7 rupees a month, from 156.4 rupees a year ago.
Reliance will also make an open offer for the two companies, according to the statement. RIL is being advised by JM Financial Limited, Citigroup Global Markets, Khaitan & Co, Cyril Amarchand Mangaldas, AZB Partners and EY LLP on this transaction.
To contact the reporter on this story: Bhuma Shrivastava in Mumbai at bshrivastav1@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Candice Zachariahs, Arijit Ghosh
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