Facebook is purchasing gigantic messaging application Whatsapp for $12 billion in stock and $4 billion in cash. This is 45th merger and acquisition by the company. Whatsapp has 400 million users.
Facebook in past puchased huge photosharing app Instagram for $1 billion on April 9, 2012.
Company stock falls 2.5% after few hours following WhatsApp purchase. [Source: Techcrunch]
Here is the press release:
On February 19, 2014, Facebook, Inc. ("Guardian") entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with Rhodium Acquisition Sub II, Inc., a Delaware company and wholly claimed (to some extent specifically and partially in a roundabout way) subsidiary of Parent ("Acquirer"), Rhodium Merger Sub, Inc., a Delaware partnership, an immediate wholly possessed subsidiary of Acquirer ("Merger Sub"), Whatsapp Inc., a Delaware enterprise ("Whatsapp"), and Fortis Advisors LLC, as the stockholders' operator.
Pursuant to the terms of the Merger Agreement, Merger Sub will blend with and into Whatsapp (the "First Merger"), and upon consummation of the First Merger, Merger Sub will cease to exist and Whatsapp will turn into a wholly claimed subsidiary of Acquirer. The surviving enterprise of the First Merger will then blend with and into Acquirer, which will keep on existing as a wholly claimed (to some degree straightforwardly and partially in a roundabout way) subsidiary of Parent. Upon consummation (the "Closing") of the transactions considered by the Merger Agreement (the "Merger"), all outstanding shares of Whatsapp capital stock and options to purchase Whatsapp capital stock will be scratched off in exchange for a total of 183,865,778 shares of Parent's Class A regular stock (esteemed at $12 billion based on the normal closing cost of the six exchanging days going before February 18, 2014 of $65.2650 for every share ("Specified Price")) and $4 billion in cash to existing Whatsapp securityholders, subject to certain adjustments such that the cash paid will comprise no less than 25% of the total transaction consideration. What's more, after Closing, Parent will give 45,966,444 restricted stock units to Whatsapp employees (esteemed at $3 billion based on the Specified Price).
The Merger Agreement contains customary representations, warranties and covenants by Parent and Whatsapp. A share of the total consideration will be held in escrow to secure the reimbursement obligations of the Whatsapp securityholders. The Closing of the Merger is subject to customary closing conditions, incorporating administrative approvals. The Merger is foreseen to close later in 2014. After Closing, Jan Koum, Whatsapp's prime supporter and CEO, will turn into a part of Parent's directorate. Furthermore, Parent has consented to record a Registration Statement on Form S-3 blanket the resale of the shares of the Company's Class A normal stock to be issued to the stockholders of Whatsapp.
It is possible that Acquirer or Whatsapp may end the Merger Agreement if the Closing has not happened prior to August 19, 2014 (or August 19, 2015 if, as of August 19, 2014, all closing conditions have been finished aside from the receipt of certain administrative approvals). In the event of end of the Merger Agreement, under particular conditions primarily identified with a disappointment to acquire obliged administrative approvals, the Merger Agreement provides for Acquirer to pay or cause to be paid to Whatsapp a charge of $1.0 billion in cash and to issue to Whatsapp various shares of Parent's Class A normal stock equivalent to $1.0 billion (based on the normal closing cost of the ten exchanging days going before such end date).
Guardian intends to issue the shares of Class A normal stock described thus in dependence upon the exemptions from registration managed by Section 4(2) and Rule 506 declared under the Securities Act of 1933, as amended.
The previous summary of the Merger Agreement and the transactions mulled over consequently don't indicate to be finished and is subject to, and qualified in its total by, the full content of the Merger Agreement, which will be recorded as a show to Parent's Quarterly Report on Form 10-Q for the quarter close March 31, 2014.
This Current Report on Form 8-K may be esteemed to hold forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, incorporating the normal fulfillment of the transactions thought over by the Merger Agreement and the time period in which this will happen. Statements with respect to future events are based on the parties' current expectations and are necessarily subject to associated risks identified with, besides everything else, administrative approbation of the acquisition of Whatsapp or that different conditions to the Closing may not be satisfied, the potential effect on the business of Whatsapp because of the report of the acquisition, the event of any event, change or other.
You can read more about Aquising at: Business Insider, CNN
Here is the press release:
On February 19, 2014, Facebook, Inc. ("Guardian") entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with Rhodium Acquisition Sub II, Inc., a Delaware company and wholly claimed (to some extent specifically and partially in a roundabout way) subsidiary of Parent ("Acquirer"), Rhodium Merger Sub, Inc., a Delaware partnership, an immediate wholly possessed subsidiary of Acquirer ("Merger Sub"), Whatsapp Inc., a Delaware enterprise ("Whatsapp"), and Fortis Advisors LLC, as the stockholders' operator.
Pursuant to the terms of the Merger Agreement, Merger Sub will blend with and into Whatsapp (the "First Merger"), and upon consummation of the First Merger, Merger Sub will cease to exist and Whatsapp will turn into a wholly claimed subsidiary of Acquirer. The surviving enterprise of the First Merger will then blend with and into Acquirer, which will keep on existing as a wholly claimed (to some degree straightforwardly and partially in a roundabout way) subsidiary of Parent. Upon consummation (the "Closing") of the transactions considered by the Merger Agreement (the "Merger"), all outstanding shares of Whatsapp capital stock and options to purchase Whatsapp capital stock will be scratched off in exchange for a total of 183,865,778 shares of Parent's Class A regular stock (esteemed at $12 billion based on the normal closing cost of the six exchanging days going before February 18, 2014 of $65.2650 for every share ("Specified Price")) and $4 billion in cash to existing Whatsapp securityholders, subject to certain adjustments such that the cash paid will comprise no less than 25% of the total transaction consideration. What's more, after Closing, Parent will give 45,966,444 restricted stock units to Whatsapp employees (esteemed at $3 billion based on the Specified Price).
The Merger Agreement contains customary representations, warranties and covenants by Parent and Whatsapp. A share of the total consideration will be held in escrow to secure the reimbursement obligations of the Whatsapp securityholders. The Closing of the Merger is subject to customary closing conditions, incorporating administrative approvals. The Merger is foreseen to close later in 2014. After Closing, Jan Koum, Whatsapp's prime supporter and CEO, will turn into a part of Parent's directorate. Furthermore, Parent has consented to record a Registration Statement on Form S-3 blanket the resale of the shares of the Company's Class A normal stock to be issued to the stockholders of Whatsapp.
It is possible that Acquirer or Whatsapp may end the Merger Agreement if the Closing has not happened prior to August 19, 2014 (or August 19, 2015 if, as of August 19, 2014, all closing conditions have been finished aside from the receipt of certain administrative approvals). In the event of end of the Merger Agreement, under particular conditions primarily identified with a disappointment to acquire obliged administrative approvals, the Merger Agreement provides for Acquirer to pay or cause to be paid to Whatsapp a charge of $1.0 billion in cash and to issue to Whatsapp various shares of Parent's Class A normal stock equivalent to $1.0 billion (based on the normal closing cost of the ten exchanging days going before such end date).
Guardian intends to issue the shares of Class A normal stock described thus in dependence upon the exemptions from registration managed by Section 4(2) and Rule 506 declared under the Securities Act of 1933, as amended.
The previous summary of the Merger Agreement and the transactions mulled over consequently don't indicate to be finished and is subject to, and qualified in its total by, the full content of the Merger Agreement, which will be recorded as a show to Parent's Quarterly Report on Form 10-Q for the quarter close March 31, 2014.
This Current Report on Form 8-K may be esteemed to hold forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, incorporating the normal fulfillment of the transactions thought over by the Merger Agreement and the time period in which this will happen. Statements with respect to future events are based on the parties' current expectations and are necessarily subject to associated risks identified with, besides everything else, administrative approbation of the acquisition of Whatsapp or that different conditions to the Closing may not be satisfied, the potential effect on the business of Whatsapp because of the report of the acquisition, the event of any event, change or other.
You can read more about Aquising at: Business Insider, CNN