Facebook has officially completed its acquisition of messaging app WhatsApp. Initially, the deal was valued at $19 billion when it was announced in February, but because of the surge in the tech giant’s shares in the past few months, the price tag has reached US$22 billion.
As part of the deal, WhatsApp Co-founder Jan Koum shall remain as its Chief Executive Officer. Apart from serving on Facebook’s board of directors, he will get nearly US$2 billion in stocks over a four-year period to encourage him to stay.
Facebook pledged that WhatsApp would continue to operate as a separate entity in order to gain regulatory approval. Despite giving the deal the green light, the US Federal Trade Commission (FTC) raised some privacy issues.
In particular, the watchdog warned Facebook to uphold WhatsApp’s policy of not collecting confidential data and to keep the users’ phone numbers out of the hands of advertisers.
As WhatsApp holds the personal information of about 600 million users, the FTC will ensure that Facebook and WhatsApp will protect that treasure trove of data, said Jessica Rich, the director for its Bureau of Consumer Protection.
In the EU, the acquisition was easily approved by the European Commission.
“We have carefully reviewed this proposed acquisition and come to the conclusion that it would not hamper competition in this dynamic and growing market. Consumers will continue to have a wide choice of consumer communications apps,” said Joaquin Almunia, the European Union’s Competition Commissioner.
Facebook’s stock price dipped by 0.3 per cent to US$77.20 on Monday morning.