Facebook has reached an agreement to acquire WhatsApp, the cross-platform mobile messaging company for $16 billion.

Image credit: flickr User: vista

Image credit: flickr User: vista

According to the press release by Facebook, the agreement includes $4 billion in cash and approximately $12 billion worth of Facebook shares, as well as $3 billion in restricted stock units that will be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.

The real-time messaging network WhatsApp has over 450 million monthly users, with 70% of them active on a specific day and over 1 million newly registered per day.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg, Facebook founder and CEO.

“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.”

“WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world,” said Jan Koum, WhatsApp co-founder and CEO.

Under the terms of the agreement, the WhatsApp brand will be maintained; the company 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.

“In the event of termination of the Merger Agreement under certain circumstances principally related to a failure to obtain required regulatory approvals, the Merger Agreement provides for Facebook to pay WhatsApp a fee of $1 billion in cash and to issue to WhatsApp a number of shares of Facebook’s Class A common stock equal to $1 billion based on the average closing price of the ten trading days preceding such termination date,” it says is in the press release.