Facebook’s Parent Company, Meta Platforms inked a deal with Shutterstock to buy Giphy for $53 million, which it initially purchased in 2020 for $315 million.
Shutterstock stated today that it has reached an agreement with Meta to acquire Giphy in a transaction that “consists of $53 million in net cash paid at closing,” implying that Meta has only recovered 13% of its investment. It stated that the transaction is expected to be finalised next month, with Meta also entering a commercial arrangement to continue accessing Giphy’s content throughout its product portfolio.
The announcement comes nearly 7 months after the UK’s Competition and Markets Authority (CMA) ordered Meta to divest Giphy, citing potential anti-competitive implications based on the merger’s reduction of dynamic competition. In June 2020, the CMA announced that it would investigate the transaction. The sale was originally ordered by the CMA in November 2021.
Giphy, a platform for searching for and using animated photos in messaging apps, was well-integrated into Meta’s ecosystem and had been a target for the social-media business for years until Meta bought it out in 2020.
Meta acknowledged in October last year that it would abandon any further appeals and grudgingly agreed to divest Giphy, but the real divestment process didn’t begin until the CMA issued its final ruling in January this year, which gave Meta a fixed period to sell its asset.
The terms of the sale required Meta to sell Giphy as a whole, rather than in fragments, and to locate a reputable buyer, a firm that would keep Giphy running as a GIF search engine. The CMA also had the last word on whom Meta might sell Giphy to.