California Department of Corporations Grants Permit to Facebook for Acquisition of Instagram
SACRAMENTO, CA (August 29, 2012) – The Department of Corporations determined Wednesday that
the terms and conditions of Facebook Inc.’s acquisition of Instagram Inc. are fair to the Instagram
shareholders and the Department will issue a permit that authorizes Facebook to issue stock for that
acquisition. This determination constitutes the final regulatory approval required for the acquisition.
Formal approval by Instagram’s shareholders must still occur.
“Our role as the State’s securities regulator is primarily to determine whether the transaction is fair to
Instagram’s 19 shareholders and the proposed exchange of securities meets that test,” said Corporations
Commissioner Jan Lynn Owen.
The finding came at the conclusion of a “Fairness Hearing” conducted under Section 25142 of the
California Corporations Code.
The Fairness Hearing was conducted by a hearing officer and Department counsel as designated by
Commissioner Owen. All 19 of Instagram shareholders were contacted and invited to participate in person
or via telephone. Witnesses from both Facebook and Instagram presented testimony related to the fairness
of the transaction.
The Fairness Hearing was conducted at the Department of Corporations’ offices in San Francisco.
The Department of Corporations is responsible for the regulation, enforcement, and licensing of securities,
franchises, investment and financial services, independent escrows, consumer and commercial finance lending,
residential mortgage lending, payday lending, off-exchange commodities, and debt reduction services. Consumers
are encouraged to contact the Department (toll-free at 1-866-ASK-CORP (1-866-275-2677) or at www.corp.ca.gov)
to check on the licensing and enforcement status of financial services businesses before engaging them.