Following UK antitrust order, Meta sells Giphy to Shutterstock for $53 million after buying it for $400 million

Meta has finally found a willing buyer for Giphy, the animated GIF search engine it bought for $400 million three years ago.

Shutterstock announced today that it has entered into an agreement with Meta to buy Giphy in a transaction that “consists of $53 million in net cash paid at close,” meaning Facebook’s parent company has only 13% of its cash. earned back. Shutterstock said it expects the deal to close next month, with Meta also signing a commercial agreement to continue accessing Giphy’s content in its suite of products.

The announcement comes about seven months after UK antitrust authority Meta issued a final injunction to sell Giphy, saying the merger reduced dynamic competition. The Competition and Markets Authority (CMA) had originally ordered the sale as far back as November 2021, but the appeals process held things back for much of a year.

Last October, Meta confirmed it would drop all further appeals and reluctantly agreed to divest Giphy, but the formal divestment process didn’t begin until the CMA issued its final order in January this year, giving Meta a certain was given time to sell its assets – BlogRanking is told this was likely a six-month window, which meant the clock was ticking for Meta to close a deal.

The terms of the sale meant that Meta had to sell Giphy as a whole, rather than selling it in pieces, and that it had to find a legitimate buyer – a company that would keep Giphy going as a GIF search engine. The CMA also had the final say on who could sell Meta Giphy to.

The Meta/Giphy acquisition had recently been thrust back into the spotlight, after the CMA confirmed in late April that it was blocking Microsoft’s megabucks Activision acquisition, a decision made even more prominent after the UK’s European counterpart in Brussels spent three weeks green light for the deal. later on.

It’s clear that the UK has recently adopted stricter antitrust policies, and while Microsoft’s $68.7 billion bid for Activision is a whole different ball game – one that’s likely to have more twists and turns as the case winds its way through the various appeals processes – it seems that the UK is trying to make up for lost time after numerous Big Tech acquisitions have passed through the regulatory approval process more or less without question.

The GIF that keeps on giving

Shutterstock, for its part, has made it clear that acquisitions would play an important part of its near-term roadmap, with CFO Jarrod Yahes saying in February that the company’s goal was to expand to different content types. So Meta’s situation in the UK with Giphy couldn’t have come at a better time, in terms of being able to buy a popular GIF platform for a low price.

Indeed, Shutterstock was in a pretty strong negotiating position here. In many M&A scenarios, the seller will try to play as strong a hand as possible to get the highest price, but in this case any potential buyer would know that Meta had its back against the wall. Simply put, a sell-out was always a likely outcome, especially given that Giphy was never really a strong company in its own right – the business value seemed to be more in helping existing platforms get stickier.

Tom Smith, a former legal director at the CMA who is now a partner at London-based law firm Geradin Partners, said Meta’s predicament was entirely her own making.

“It was Facebook’s decision to finalize the merger before the CMA cleared it,” he said.

Shutterstock has been making more and more strides in the AI ​​realm of late, though the New York company’s bread and butter remains old-fashioned human-generated stock photos. And it’s easy to see how GIFs would fit into that. In the wake of today’s announcement, the company said the deal will allow it to expand its content library to include GIFs and stickers for advertisers and brands, though it suggested it will also help it access a market it hasn’t hit until now. targeted: consumers. The company also said the deal helps it bolster its nascent “generative AI and metadata strategy.”

“Through the acquisition of Giphy, we’re expanding our audience’s touchpoints beyond primarily professional marketing and advertising use cases and expanding into casual conversations,” Paul Hennessy, CEO of Shutterstock, said in a press release. “Giphy empowers everyday users to express themselves in memorable ways with GIF and sticker content, while also allowing brands to be a part of these casual conversations. We plan to leverage Shutterstock’s unique capabilities in content and metadata monetization, generative AI, studio production, and creative automation to enable the commercialization of our GIF library as we bring these offerings to customers. unroll.”

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