October 3, 2014
Facebook today has been given the European Union’s seal of approval for its $19-billion acquisition of popular messaging service WhatsApp.
The purchase, the largest in Facebook’s history, has the potential to add to the social network’s already substantial user base as well as accelerate its advancement in mobile services.
The European Commission, the executive body of the European Union, said it has concluded the transaction will not raise competition concerns.
“The Commission found that Facebook Messenger and WhatsApp are not close competitors and that consumers would continue to have a wide choice of alternative consumer communications apps after the transaction,” the agency said in a press release.
“Although consumer communications apps are characterized by network effects, the investigation showed that the merged entity would continue to face sufficient competition after the merger.”
Facebook is paying $4 billion in cash and approximately $12 billion worth of Facebook shares to acquire WhatsApp. The deal also includes $3 billion in restricted stock units for WhatsApp’s founders and employees. It will vest over four years subsequent to closing.
Facebook in May asked the European Commission to review its multi-billion deal to acquire WhatsApp in a bid to dodge multiple anti-trust inspections in a number of countries.
The acquisition has also received the green light from the Federal Trade Commission (FTC) in the U.S.
Jennifer Cowan is the Managing Editor for SiteProNews.