US regulators approve buy, but the value of the deal drops significantly thanks to Facebook’s shares dive
Facebook’s purchase of photo-sharing service Instagram, originally valued at $1 billion (£630m), has got final approval from regulators – but is now worth only $750 million.
The US Federal Trade Commission (FTC) agreed to approve the sale, ending its anti-trust investigation. However, in the four months since the sale was agreed, Facebook shares have been floated, and tumbled in price, so the final value is roughly three-quarters of the original figure.
Facebook share flop
However, Facebook shares were floated in May, exchanging hands for as much as $38 in early trading, but this has now fallen to about $19.44 so the total value given for Instagram is “only” $744 million (£468m).
This is still an impressive value for a photo app company with only 13 employees and zero revenue.
The UK’s Office of Fair Trading said last week it would not object to the deal. It had earlier said it would consider whether the deal caused a “lessening of competition” in the area of sharing photos online.
The deal is now over the major regulatory hurdles, but Facebook is still not promising to complete it till the end of the year, having earlier said it hoped to own Instagram by the end of the second quarter.
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