SAN FRANCISCO (Reuters) - The U.S. Federal Trade Commission cleared Facebook Inc’s acquisition of Instagram on Wednesday, voting unanimously to close its antitrust investigation into the deal without taking any action.
The move frees Facebook to complete its acquisition of the mobile photo application maker, the biggest acquisition in Facebook’s history. Facebook announced plans to acquire Instagram in a cash and stock deal for $1 billion in April.
The deal is currently valued at $747.1 million, based on the $19.44 closing price of Facebook’s shares on Wednesday.
Shares of the world’s No.1 online social network have been battered, declining roughly 50 percent since the company’s highly-anticipated initial public offering in May. Slowing revenue growth and a flood of insider shares that could hit the market in the coming months are among the key concerns among investors.
The Instagram application, which allows users to add filters and effects to pictures taken on their smartphones, could bolster Facebook’s mobile efforts - an area that is considered something of a weak spot for the company.
The deal also ensures that the fast-growing mobile app, which said it had 80 million users in July, will not fall into the hands of a Facebook rival, such as Twitter or Google Inc.
Still, the rich price that Facebook paid for the two-year-old company, which doesn’t have any revenue, stunned analysts and investors.
Facebook said in its most recent 10Q regulatory filing that it plans to maintain Instagram’s products “as independent mobile applications to enhance our photos product offerings and to enable users to increase their levels of mobile engagement and photo sharing.”
Facebook said in a statement on Wednesday that it was pleased that the FTC has cleared the transaction. The company did not provide a further update on the timing of the deal, which it has said it expects to close by the end of the year.
Reporting By Alexei Oreskovic; Editing by Bernard Orr