Facebook closes WhatsApp deal
Facebook has completed its purchase of mobile messaging app WhatsApp, paying nearly $22 billion for the acquisition. With WhatsApp’s share price having risen by more than 13% since the deal was struck in February of this year, Facebook has been coerced into paying an additional $3 billion on top of the original $19 billion price tag.
“We are looking forward to connecting even more people around the world, and continuing to create value for the people who use WhatsApp,” says Facebook in an official statement.
Terms of the deal include adding Co-Founder of the messaging service, Jan Koum to Facebook’s Board of Directors, as well as remaining head of the company, where he will receive a one dollar per-year salary, mirroring that of Facebook Chief Mark Zuckerberg. Jan will also receive 25 million restricted stock units if he stays with the company for four years; with the RSUs at a current market value worth over $1.9 billion.
In a statement regarding approval of the deal, the European Commission said that Facebook and WhatsApp were not close competitors, and that consumers would continue to be offered a wide array of choices.
Joaquin Almunia, EU Compeition Commissioner adds, “We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market.”
With WhatsApp now used by 600 million people, the buyout included 177 million Facebook shares, as well as $4.59 billion in cash. In addition, Facebook has agreed to provide 45.9 million restricted shares to WhatsApp employees.