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Facebook Closes WhatsApp Purchase

Posted by Sara | Opinion | Wednesday 8 October 2014 6:15 am

Facebook Closes WhatsApp Purchase

Facebook has closed its acquisition of WhatsApp, mobile messaging service, in a deal that is now worth $21.8 billion, up from the original $19 billion deal struck primarily because of the rising stock price of the social network giant since February.

Menlo Park, California-based Facebook said it has named WhatsApp co-founder and CEO Jan Koum to its board of directors. WhatsApp has more than 500 million users and the mobile messaging service is rapidly growing especially in Brazil, India, Mexico, and Russia.

The Facebook-WhatsApp deal was hashed out in the house of Mark Zuckerberg over the course of a few days in February and sealed over a bottle of Jonnie Walker scotch. Last February, WhatsApp founders Jan Koum and Brian Acton became billionaires when it was announced by Facebook that it was buying the mobile messaging service for a jaw-dropping $19 billion. Facebook, as part of its attempt to win regulatory approval, promised on February 19 this year that WhatsApp would remain a separate entity.

 

In an SEC filing over the weekend, Facebook said it will now award 177.8 million shares of its Class A common stock and $4.59 billion in cash to the shareholders of WhatsApp plus 45.9 million shares (restricted stock units) to employees of WhatsApp to complete the deal. In a document filed with the US Securities and Exchange Commission, it was revealed that @WhatsApp will live on as a wholly owned subsidiary of Facebook. It was further disclosed that WhatsApp co-founder and CEO Jan Koum will become a member of Facebook’s board of directors.

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