Facebook has finally closed the buy out of mobile messaging service WhatsApp. The price is set at 22 Billion Dollars; a higher price that it was to pay when it announced its intent in February this year.
The earlier offer for the popular chat app was stated at 19 Billion Dollars. However, but due to the rise of Facebook’s share price with more than 13 per cent in the seven months since the announcement, the figure has significantly gone up.
According to a filing made on Monday, October 6th, the acquisition will see Jan Koum, the founder of WhatsApp messenger receive nearly $2 billion in stock. This is to be distributed over a 4-year period as part of an inducement for him to stay with the company.
Facebook has already paid a sum $4.59 billion in cash and 178 million shares of its stock for WhatsApp, 46 million of grants in restricted stock units for the employs to also be spread out over a four-year period.
Jan Koum, who will be joining the Facebook board and will serve as the WhatsApp chief executive will earn an annual salary of $1, to match that of Mark Zuckerberg. He is also not eligible for the company’s bonus plan.
WhatsApp, which has more than 600 million monthly users, has more than 70 employees who will continue to work from their current offices.
Completion of the acquisition follows an approval by the European Commission last week.
Facebook has been expanding in emerging markets but has been plagued by inability of the people there to access the internet due to the high cost of data.