Social media giant Facebook Inc (NASDAQ:FB) announced on Monday, October 6th that its $20 billion plus acquisition of instant messaging leader Whatsapp was finalized as both the U.S. SEC and the European Commission had signed off on the deal. Shares of acquisition-happy Facebook are up 41 cents at $77.85 as of 1:45 PM ET Monday.
Details on the Whatsapp – Facebook deal
Further details regarding the final terms of the deal included the awarding of 177,760,669 shares of Facebook’s Class A common stock and $4.59 billion in cash to WhatsApp owners, plus 45,941,775 shares of restricted stock to be distributed to WhatsApp employees.
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It was also spelled out that Koum will continue to run Whatsapp as a division of Facebook and will also serve on the Facebook Inc (NASDAQ:FB) board of directors. Of note, Koum is receiving a signing bonus of 24,853,468 restricted stock units of Facebook as an incentive for joining the firm. Koum does not have a fixed term of employment as part of the deal, but he has made it clear from the beginning that he plans to continue to work to build WhatsApp as a separate brand under the rapidly expanding Facebook umbrella.
Moreover, Facebook committed to let the highly successful Whatsapp continue to operate independently after the acquisition. That means don’t expect WhatsApp to abandon its $1/year business model or to see ads on the popular messaging platform any time soon.
WhatsApp CEO Jan Koum to match Zuckerberg’s $1 annual salary
According to the regulatory filings, WhatsApp founder Jan Koum will be joining Facebook Inc (NASDAQ:FB)’s board as part of the deal. The filings also indicate that Koum will just be drawing a $1 annual salary like Facebook CEO Mark Zuckerberg, and by the same token, will also not be eligible for the company’s bonus plan.