Facebook is to purchase messaging app WhatsApp for a sum of $16 billion, through a sale that is divided into $12 billion in Facebook shares and $4 billion cash.
There is also a $3 billion transaction between the two companies in RSUs (restricted stock units) for retaining employees. The acquisition was revealed in an SEC filing.
WhatsApp has approximately 450 million users per month and 70 per cent is active “on any given day”, according to statement from Facebook. This means that Facebook is paying roughly $42 per user. The messaging app claims that they are adding one million users a day.
The sale figure is staggering and upon its announcement, Facebook’s shares dropped five percent in after-hours trading. The deal includes a proviso that if the sale does not pass regulators, Facebook must pay WhatsApp $1 billion in cash and $1 billion in shares.
“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg. The messaging app will continue to operate independently and maintain its brand, much like Instagram. The company currently employs about 55 people.
Facebook has also stated that WhatsApp founder and CEO Jan Koum will join the Facebook board. “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,” he said.
“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,” added Zuckerberg.