Facebook to Acquire WhatsApp

Febru짯ary 19, 2014

  • Acqui짯si짯ti짯on acce짯le짯ra짯tes Facebook셲 abili짯ty to bring con짯nec짯ti짯vi짯ty and uti짯li짯ty to the world
  • Lea짯ding mobi짯le mes짯sa짯ging com짯pa짯ny will con짯ti짯nue to ope짯ra짯te inde짯pendent짯ly and retain its brand
  • Whats짯App co-foun짯der and CEO Jan Koum to join Face짯book Board of Directors

MENLO PARK, CALIF. Febru짯ary 19, 2014 Face짯book today announ짯ced that it has rea짯ched a defi짯ni짯ti짯ve agree짯ment to acqui짯re Whats짯App, a rapidly gro짯wing cross-plat짯form mobi짯le mes짯sa짯ging com짯pa짯ny, for a total of appro짯xi짯m짯ate짯ly $16 bil짯li짯on, inclu짯ding $4 bil짯li짯on in cash and appro짯xi짯m짯ate짯ly $12 bil짯li짯on worth of Face짯book shares. The agree짯ment also pro짯vi짯des for an addi짯tio짯nal $3 bil짯li짯on in rest짯ric짯ted stock units to be gran짯ted to WhatsApp셲 foun짯ders and employees that will vest over four years sub짯se짯quent to closing.

Whats짯App has built a lea짯ding and rapidly gro짯wing real-time mobi짯le mes짯sa짯ging ser짯vice, with:

  • Over 450 mil짯li짯on peo짯p짯le using the ser짯vice each month;
  • 70% of tho짯se peo짯p짯le acti짯ve on a given day;
  • Mes짯sa짯ging volu짯me approa짯ching the enti짯re glo짯bal tele짯com SMS volu짯me; and
  • Con짯tin짯ued strong growth, curr짯ent짯ly adding more than 1 mil짯li짯on new regis짯tered users per day.

The acqui짯si짯ti짯on sup짯ports Face짯book and WhatsApp셲 shared mis짯si짯on to bring more con짯nec짯ti짯vi짯ty and uti짯li짯ty to the world by deli짯ve짯ring core inter짯net ser짯vices effi짯ci짯ent짯ly and afford짯a짯b짯ly. The com짯bi짯na짯ti짯on will help acce짯le짯ra짯te growth and user enga짯ge짯ment across both companies.

Whats짯App is on a path to con짯nect 1 bil짯li짯on peo짯p짯le. The ser짯vices that reach that mile짯stone are all incre짯di짯bly valuable, said Mark Zucker짯berg, Face짯book foun짯der and CEO. 쏧셶e known Jan for a long time and I셫 exci짯ted to part짯ner with him and his team to make the world more open and connected.

Jan Koum, Whats짯App co-foun짯der and CEO, said, 쏻hatsApp셲 extre짯me짯ly high user enga짯ge짯ment and rapid growth are dri짯ven by the simp짯le, powerful and instanta짯neous mes짯sa짯ging capa짯bi짯li짯ties we pro짯vi짯de. We쇑춓e exci짯ted and hono짯red to part짯ner with Mark and Face짯book as we con짯ti짯nue to bring our pro짯duct to more peo짯p짯le around the world.

Face짯book fos짯ters an envi짯ron짯ment whe짯re inde짯pen짯dent-min짯ded entre짯pre짯neurs can build com짯pa짯nies, set their own direc짯tion and focus on growth while also bene짯fiting from Facebook셲 exper짯ti짯se, resour짯ces and sca짯le. This approach is working well with Insta짯gram, and Whats짯App will ope짯ra짯te in this man짯ner. WhatsApp셲 brand will be main짯tai짯ned; its head짯quar짯ters will remain in Moun짯tain View, CA; Jan Koum will join Facebook셲 Board of Direc짯tors; and WhatsApp셲 core mes짯sa짯ging pro짯duct and Facebook셲 exis짯ting Mes짯sen짯ger app will con짯ti짯nue to ope짯ra짯te as stan짯da짯lo짯ne applications.

Upon clo짯sing of the deal, all out짯stan짯ding shares of Whats짯App capi짯tal stock and opti짯ons to purcha짯se Whats짯App capi짯tal stock will be can짯cel짯led in exch짯an짯ge for $4 bil짯li짯on in cash and 183,865,778 shares of Face짯book Class A com짯mon stock (worth $12 bil짯li짯on based on the avera짯ge clo짯sing pri짯ce of the six tra짯ding days pre짯ce짯ding Febru짯ary 18, 2014 of $65.2650 per share). In addi짯ti짯on, upon clo짯sing, Face짯book will grant 45,966,444 rest짯ric짯ted stock units to Whats짯App employees (worth $3 bil짯li짯on based on the avera짯ge clo짯sing pri짯ce of the six tra짯ding days pre짯ce짯ding Febru짯ary 18, 2014 of $65.2650 per share). As of Febru짯ary 17, 2014, Face짯book had 2,551,654,996 Class A and B shares out짯stan짯ding plus appro짯xi짯m짯ate짯ly 139 mil짯li짯on dilu짯ti짯ve secu짯ri짯ties pri짯ma짯ri짯ly con짯sis짯ting of unves짯ted RSUs. The Class A com짯mon stock and RSUs issued to Whats짯App share짯hol짯ders and employees upon clo짯sing will repre짯sent 7.9% of Face짯book shares based on cur짯rent shares and RSUs outstanding.

In the event of ter짯mi짯na짯ti짯on of the Mer짯ger Agree짯ment under cer짯tain cir짯cum짯s짯tances prin짯ci짯pal짯ly rela짯ted to a fail짯ure to obtain requi짯red regu짯la짯to짯ry appr짯ovals, the Mer짯ger Agree짯ment pro짯vi짯des for Face짯book to pay Whats짯App a fee of $1 bil짯li짯on in cash and to issue to Whats짯App a num짯ber of shares of Facebook셲 Class A com짯mon stock equal to $1 bil짯li짯on based on the avera짯ge clo짯sing pri짯ce of the ten tra짯ding days pre짯ce짯ding such ter짯mi짯na짯ti짯on date.

Face짯book was advi짯sed by Allen & Com짯pa짯ny LLC and Weil, Gotshal & Man짯ges LLP; and Whats짯App was advi짯sed by Mor짯gan Stan짯ley and Fen짯wick & West, LLP.

Web짯cast and Con짯fe짯rence Call Information

Face짯book will host a 30-minu짯te con짯fe짯rence call to dis짯cuss the acqui짯si짯ti짯on at 3:00 pm PT / 6:00pm ET today. The dial-in num짯ber for the call is (866) 7513284 (toll free) and (973) 9358772 (inter짯na짯tio짯nal), con짯fe짯rence ID: 2907041. The live web짯cast of the call can be acces짯sed at the Face짯book Inves짯tor Rela짯ti짯ons web짯site at investor.fb.com. Face짯book uses the web짯site http://investor.fb.com as a means of dis짯clo짯sing mate짯ri짯al non-public infor짯ma짯ti짯on and for com짯ply짯ing with its dis짯clo짯sure obli짯ga짯ti짯ons under Regu짯la짯ti짯on FD.

Fol짯lo짯wing the call, a replay will be available at the same web짯site. A tele짯pho짯nic replay will be available for one week fol짯lo짯wing the con짯fe짯rence call at (855) 8592056 or (404) 5373406, con짯fe짯rence ID 2907041.

About Face짯book

Facebook셲 mis짯si짯on is to give peo짯p짯le the power to share and make the world more open and con짯nec짯ted. Peo짯p짯le use Face짯book to stay con짯nec짯ted with fri짯ends and fami짯ly, to dis짯co짯ver what셲 going on in the world, and to share and express what mat짯ters to them.

About Whats짯App

Whats짯App is a per짯so짯nal real-time mes짯sa짯ging net짯work allo짯wing mil짯li짯ons of peo짯p짯le around the world to stay con짯nec짯ted with their fri짯ends and family.

For짯ward Loo짯king Statements
This press release may be dee짯med to con짯tain for짯ward-loo짯king state짯ments, which are sub짯ject to the safe har짯bor pro짯vi짯si짯ons of the Pri짯va짯te Secu짯ri짯ties Liti짯ga짯ti짯on Reform Act of 1995, inclu짯ding the expec짯ted com짯ple짯ti짯on of the acqui짯si짯ti짯on, the time frame in which this will occur, the expec짯ted bene짯fits to Face짯book and Whats짯App from com짯ple짯ting the acqui짯si짯ti짯on, and the expec짯ted finan짯cial per짯for짯mance of Face짯book fol짯lo짯wing com짯ple짯ti짯on of the acqui짯si짯ti짯on. State짯ments regar짯ding future events are based on the par짯ties cur짯rent expec짯ta짯ti짯ons and are neces짯s짯a짯ri짯ly sub짯ject to asso짯cia짯ted risks rela짯ted to, among other things, regu짯la짯to짯ry appr짯oval of the pro짯po짯sed acqui짯si짯ti짯on or that other con짯di짯ti짯ons to the clo짯sing of the deal may not be satis짯fied, the poten짯ti짯al impact on the busi짯ness of Whats짯App due to the announce짯ment of the acqui짯si짯ti짯on, the occur짯rence of any event, chan짯ge or other cir짯cum짯s짯tances that could give rise to the ter짯mi짯na짯ti짯on of the defi짯ni짯ti짯ve agree짯ment, and gene짯ral eco짯no짯mic con짯di짯ti짯ons. The짯r짯e짯fo짯re, actu짯al results may dif짯fer mate짯ri짯al짯ly and adver짯se짯ly from tho짯se expres짯sed in any for짯ward-loo짯king state짯ments. For infor짯ma짯ti짯on regar짯ding other rela짯ted risks, see the 쏳isk Fac짯tors sec짯tion of Facebook셲 Annu짯al Report on Form 10멚 for 2013. The for짯ward-loo짯king state짯ments included her짯ein are made only as of the date hereof, and neither par짯ty under짯ta짯kes an obli짯ga짯ti짯on to revi짯se or update any for짯ward-loo짯king state짯ments for any reason.