Facebook will pay 4 billion dollars in cash and about 12 billion dollars worth of its shares for WhatsApp. An additional 3 billion dollars in restricted stock units will be granted to WhatsApp's founders and employees that will vest over four years subsequent to closing.
WhatsApp was founded in 2009 by American Brian Acton and Ukrainian Jan Koum, both former employees of Yahoo! Inc.
More than 450 million people use WhatsApp's real-time mobile messaging service each month, with 70% of those people active on a given day.
Following the acquisition, WhatsApp's brand will be maintained and its headquarters will remain in Mountain View, California. WhatsApp co-founder and CEO Jan Koum will join Facebook's Board of Directors.
WhatsApp's messaging product and Facebook's existing Messenger app will continue to operate as stand-alone applications.
"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO. "I've known Jan for a long time and I'm excited to partner with him and his team to make the world more open and connected."
If the merger deal is terminated under certain circumstances mainly related to a failure to obtain required regulatory approvals, Facebook will pay WhatsApp 1 billion dollars in cash and 1 billion dollas in shares.
Internet companies are in a frenzy to buy popular technology start-ups. WhatsApp will be Facebook's biggest acquisition by far. In 2012, Facebook bought photo sharing start-up Instagram for $1 billion.
2014 Feb, 20