Facebook to acquire WhatsApp
Facebook on Thursday said it has reached a
"definitive agreement" to acquire mobile messaging firm WhatsApp for
approximately $16 billion, including $4 billion in cash and about $12 billion
worth of Facebook shares.
However, the ultimate cost of the deal is likely to be
about $19 billion as "the agreement also provides for an additional $3
billion in restricted stock units to be granted to WhatsApp’s founders and
employees that will vest over four years subsequent to closing."
WatsApp will continue to operate independently and retain
its brand, while its co-founder and CEO Jan Koum will join Facebook Board of
Directors, the social networking firm said in a statement.
WhatsApp’s core messaging product and Facebook’s existing
Messenger app will continue to operate as standalone applications.
The acquisition supports Facebook and WhatsApp's shared
mission to bring more connectivity and utility to the world by delivering core
internet services efficiently and affordably. The combination will help
accelerate growth and user engagement across both companies, it added.
"WhatsApp is on a path to connect 1 billion people.
The services that reach that milestone are all incredibly valuable,"
Facebook founder and CEO Mark Zuckerberg said.
In the event of termination of the Merger Agreement under
certain circumstances principally related to a failure to obtain required
regulatory approvals, the Merger Agreement provides for Facebook to pay
WhatsApp a fee of $1 billion in cash and to issue to WhatsApp a number of
shares of Facebook’s Class A common stock equal to $1 billion based on the
average closing price of the ten trading days preceding such termination date,
the statement added.
Facebook was advised by Allen & Company LLC and Weil,
Gotshal & Manges LLP; and WhatsApp was advised by Morgan Stanley and
Fenwick & West, LLP.
Facebook to acquire WhatsApp
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