Facebook acquires WhatsApp messaging service for $19 billion (Update: Facebook statement)

An SEC filing today confirmed that Facebook intends to purchase the WhatsApp messaging service for $16 billion.

WhatsApp is available on a host of platforms, including iOS and Android, and acts as an alternative SMS service. It’s likely that Facebook wants to integrate the app’s technology into Facebook’s own Messenger client, which recently gained SMS-style phone number-based messaging.

Facebook has provided more details of the sale, which will include $4 billion in cash and $12 billion in Facebook stock. An additional $3 billion in restricted stock will also be given to the WhatsApp staff. These shares will vest over four years after the deal is closed.

You can read the full SEC filing and Facebook press release below:

Facebook to Acquire WhatsApp

February 19, 2014

  • Acquisition accelerates Facebook’s ability to bring connectivity and utility to the world
  • Leading mobile messaging company will continue to operate independently and retain its brand
  • WhatsApp co-founder and CEO Jan Koum to join Facebook Board of Directors

MENLO PARK, CALIF. – February 19, 2014 – Facebook today announced that it has reached a definitive agreement to acquire WhatsApp, a rapidly growing cross-platform mobile messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. 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.

WhatsApp has built a leading and rapidly growing real-time mobile messaging service, with:

  • Over 450 million people using the service each month;
  • 70% of those people active on a given day;
  • Messaging volume approaching the entire global telecom SMS volume; and
  • Continued strong growth, currently adding more than 1 million new registered users per day.

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.

“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.”

Jan Koum, WhatsApp co-founder and CEO, said, “WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”

Facebook fosters an environment where independent-minded entrepreneurs can build companies, set their own direction and focus on growth while also benefiting from Facebook’s expertise, resources and scale. This approach is working well with Instagram, and WhatsApp will operate in this manner. WhatsApp’s brand will be maintained; its headquarters will remain in Mountain View, CA; Jan Koum will join Facebook’s Board of Directors; and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.

Upon closing of the deal, all outstanding shares of WhatsApp capital stock and options to purchase WhatsApp capital stock will be cancelled in exchange for $4 billion in cash and 183,865,778 shares of Facebook Class A common stock (worth $12 billion based on the average closing price of the six trading days preceding February 18, 2014 of $65.2650 per share). In addition, upon closing, Facebook will grant 45,966,444 restricted stock units to WhatsApp employees (worth $3 billion based on the average closing price of the six trading days preceding February 18, 2014 of $65.2650 per share). As of February 17, 2014, Facebook had 2,551,654,996 Class A and B shares outstanding plus approximately 139 million dilutive securities primarily consisting of unvested RSUs. The Class A common stock and RSUs issued to WhatsApp shareholders and employees upon closing will represent 7.9% of Facebook shares based on current shares and RSUs outstanding.

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.

Facebook was advised by Allen & Company LLC and Weil, Gotshal & Manges LLP; and WhatsApp was advised by Morgan Stanley and Fenwick & West, LLP.

Webcast and Conference Call Information

Facebook will host a 30-minute conference call to discuss the acquisition at 3:00 pm PT / 6:00pm ET today. The dial-in number for the call is (866) 751-3284 (toll free) and (973) 935-8772 (international), conference ID: 2907041. The live webcast of the call can be accessed at the Facebook Investor Relations website at investor.fb.com. Facebook uses the website http://investor.fb.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at (855) 859-2056 or (404) 537-3406, conference ID 2907041.

About Facebook

Facebook’s mission is to give people the power to share and make the world more open and connected. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

About WhatsApp

WhatsApp is a personal real-time messaging network allowing millions of people around the world to stay connected with their friends and family.

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Comments

  1. danbridgland - 9 years ago

    Wow!

    Them shareholders will sure be pleased those Facebook folk are thrifty careful when it comes to spending their cash

    • juzhax - 9 years ago

      That’s why never update for long time … I still prefer WeChat and Line …

  2. mhkobe - 9 years ago

    Wat?!

  3. Given that FB has a pretty solid solution when it comes to messaging as it is, I guess it’s more of a patent thing. I mean, developing the missing features and integrating them into that will cost them a heck of a lot less than $16b. I haven’t used WhatsApp for a while but back then I wasn’t particularly impressed from it.

  4. Ash Boer - 9 years ago

    This would suck, Hate using Facebook messaging

  5. Interesting.. I thought Google will eventually would buy WhatsApp. Anyway i think $16B is too much.

  6. Facebook has that much money and options to spend?

  7. Shaun Francis Jones - 9 years ago

    If Facebook get rid of their messenger app and update whatsapp to the messenger app then that would be an amazing way to get everyone using their messenger app :D

  8. Circa Enterprise - 9 years ago

    WeChat? hahaha

    So Asian.

    • Mark Lawrance - 9 years ago

      actually this has been posible for a while now. peekepeek.com integrated facebook and whatsapp a while ago

  9. iCurrency Plus - 9 years ago

    Facebook revenue is based in ads. Whatsapp has millions of users using the app daily. Facebook just bought a revenue stream, they will not kill the app; they will merge it little by little into their infrastructure. Was this worth 16billion? I will leave that to the M&A experts. But remember: Microsoft bought Skype for 5B!

  10. Nacho (@ignatiusfv) - 9 years ago

    Wow.. I don’t like this. I mean, if Facebook buys Whatsapp we could at least expect faster updates (Whatsapp is known for being REALLY late to deadlines when it comes to updating). But I mean, I don’t even have a Facebook account, so I guess now I’ll have to create one (I really don’t want to !!!!!!!) to use Whatsapp, because they’ll probably merge it with Facebook. As every other single app has. Sigh.

  11. Tom Rudderham - 9 years ago

    Here’s an interesting story, in 2009 WhatsApp co-founder Brian Acton was rejected by both Facebook and Twitter: http://iosguides.net/facebook-turned-whatsapp-ceo-job-2009/

  12. Nicklas Gutemberg - 9 years ago

    Facebook with whatsapp?? Russians controlling telegram?? Not for me!! I have found a secure messenger named HushHushApp, it is strongly secure. Hope it grow! Bye bye big brother!

  13. Paul Schram - 9 years ago

    It’s useless for me unless I can download it to my iPad, or my iPod Touch 5. I don’t know why you have to have an iPhone for something like this to work.

  14. Mark Lawrance - 9 years ago

    Amazing news! I thought facebook was already trying to integrate with whatsapp through the peekepeek program

  15. Friedrich Towel - 9 years ago

    Niiice, actually this has been posible for a while now, peekepeek iintegrated facebook and whatsapp a while ago

  16. Mark Lawrance - 9 years ago

    Amazing news! I thought facebook was already trying to integrate with whatsapp through the peekepeek program
    actually this has been posible for a while now. peekepeek.com integrated facebook and whatsapp a while ago

  17. dezer.de - 9 years ago

    Time to switch to Threema.

  18. Toddger (@Toddger) - 9 years ago

    Argh. Just another stream of personal data for Facebook to own (and sell) about you

  19. paul (@pauljauregui) - 9 years ago

    Whats up with WhatsApp’s Security? Multiple SSL vulnerabilities found in Facebook’s new $19B mobile app acquisition http://www.praetorian.com/blog/whats-up-with-whatsapps-security-facebook-ssl-vulnerabilities

  20. Dianna Bai - 9 years ago

    As someone in the visual media industry, I think that Facebook acquired WhatsApp for the private photo sharing. Here are my thoughts! http://reelgenie.com/blog/photo-whispers-why-facebook-acquired-whatsapp-for-19-billion/