Facebook’s Instagram Purchase Delayed Until Later This Year
Facebook’s far-famed $1 billion purchase of Instagram may be in a bit of trouble. It seems that in IPO-related documents filed with the SEC today, Facebook revised its expectation of when the deal would close. The original projection had the purchase closing sometime during the second quarter (i.e., the end of June). The revised filing simply says that the purchase will be finalized sometime this year.
According to the Wall Street Journal, Facebook’s filing does not say why the purchase has been delayed, though concerns over regulatory review seem a likely culprit. Last week we brought you news that the Federal Trade Commission was launching a competition probe into the purchase. At the time we speculated that the probe could delay the the deal past the projected Q2 closing date. Facebook’s filing today appears to confirm that.
Facebook agreed to acquire Instagram in April for $1 billion. The price was high enough to surprise many people, and high enough to trigger an automatic investigation by the FTC.
Facebook’s woes with the Instagram purchase, however, have not prevented it from moving forward with other deals. Just this morning Facebook purchased Lightbox, another photo-sharing service, with the apparent intention of shutting it down and folding it into Facebook’s own photo sharing functionality.
As part of the original purchase agreement with Instagram, Facebook agreed to pay the company a $200 million consolation prize if the deal failed to obtain regulatory approval.