Facebook Acquires WhatsApp for $19 Billion

WhatsApp founders Brian Acton and Jan Koum at their headquarters in Mountain View. (PHOTO CREDIT: Robert Gallagher for Forbes)
WhatsApp founders Brian Acton and Jan Koum at their headquarters in Mountain View. (PHOTO CREDIT: Robert Gallagher for Forbes)

Facebook says it has wrapped up its landmark $19 billion acquisition of WhatsApp, a deal that was hashed out in Mark Zuckerberg’s house over the course of a few days in February and sealed over a bottle of Jonnie Walker scotch.

WhatsApp has continued to run its operation completely independently since then, but the closing of the deal marks the start of a gradual integration as Facebook gives the world’s biggest mobile messaging service legal and administrative support and — eventually, we can presume — finds new ways to monetize the company it spent more than Iceland’s GDP on.

WhatsApp founders Jan Koum and Brian Acton became billionaires last February when Facebook announced it was buying the company they had started five years ago for a jaw-dropping $19 billion. Having mostly shunned venture capital investments till then the founders had kept large stakes. Koum still had around 45% at the time of the deal, leaving the Ukrainian-born immigrant to pocket $6.8 billion and former Yahoo engineer Acton with $3.5 billion after taxes. WhatsApp founder Jan Koum now gets a seat on the Facebook board and will match Zuckerberg’s $1 salary.

Facebook will now award 177.8 million shares of its Class A common stock and $4.59 billion in cash to WhatsApp’s shareholders, it said in an SEC filing over the weekend, plus 45.9 million shares (restricted stock units) to WhatsApp’s employees to complete the deal.

Fortunately for those parties, the value of Facebook’s shares are now higher than they were when the deal was announced in February, notes Re/code’s Peter Kafka, making the deal worth around $21.8 billion.

Click here to read more.

SOURCE: Forbes
Parmy Olson

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