New Delhi: Meta, formerly known as Facebook, has reached an agreement to sell Giphy, the popular animated GIF search engine, to Shutterstock for $53 million. This comes three years after Meta acquired Giphy for a hefty sum of $400 million.
Shutterstock, a leading provider of stock photos, videos, and music, announced the deal, stating that it involves a cash payment of $53 million at the closing of the transaction, which includes working capital. The acquisition is expected to be finalized next month. Additionally, as part of the agreement, Meta will continue to have access to Giphy’s content through a commercial agreement that extends across its product suite.
The sale of Giphy by Meta follows a final order issued by the U.K.’s Competition and Markets Authority (CMA) about seven months ago. The CMA mandated Meta to divest Giphy due to concerns that the merger had reduced competition in the market. The original order to sell Giphy was issued by the CMA in November 2021, but the appeals process delayed the divestment process.
In October of the previous year, Meta announced that it would no longer pursue further appeals and reluctantly agreed to divest Giphy. However, the formal divestment process did not commence until January of the current year, when the CMA issued its final order. This order set a specific timeframe, likely around six months, for Meta to sell the asset, putting pressure on the company to find a suitable buyer.
The conditions of the sale required Meta to sell Giphy as a complete entity rather than dividing it into separate parts. Furthermore, it was essential to find a buyer who would maintain Giphy’s operations as a GIF search engine.
By selling Giphy to Shutterstock, Meta fulfils its obligation to divest the asset while ensuring the continuity of Giphy as a popular platform for animated GIFs. The acquisition by Shutterstock presents an opportunity for the stock media company to expand its offerings and potentially integrate Giphy’s vast library of GIFs into its existing services.
The $53 million price tag for Giphy represents a substantial decrease from Meta’s initial investment of $400 million. Nevertheless, this transaction allows Meta to comply with regulatory requirements and focus on its core business while providing Shutterstock with a valuable addition to its portfolio.
As the deal approaches its closing date, both Meta and Shutterstock anticipate a smooth transition, and users can continue to enjoy the animated GIFs and search capabilities that Giphy provides.
