WhatsApp coming over the hill? It's a US$16 billion Facebook acquisition

Facebook has reached a definitive agreement to acquire WhatsApp for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares.

The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.

According to an official release by the social media giant today, the acquisition supports Facebook and WhatsApp's shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably. The combination will help accelerate growth and user engagement across both companies.

"WhatsApp is on a path to connect 1 billion people - the services that reach that milestone are all incredibly valuable," says Mark Zuckerberg, founder and CEO, Facebook.

"I've known Jan for a long time and I'm excited to partner with him and his team to make the world more open and connected."

According to Zuckerberg, Facebook fosters an environment where independent-minded entrepreneurs can build companies, set their own direction and focus on growth while also benefiting from Facebook’s expertise, resources and scale.

This approach is working well with Instagram, and WhatsApp will operate in this manner. WhatsApp’s brand will be maintained; its headquarters will remain in Mountain View, CA; Jan Koum will join Facebook’s Board of Directors; and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.

“WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide,": says Jan Koum, founder and CEO, WhatsApp.

"We're excited and honoured to partner with Mark and Facebook as we continue to bring our product to more people around the world.”