What is an Acquiree?

An acquiree is a target company that is subject to an acquisition attempt by an acquirer. The acquiree is usually smaller than the acquirer, in terms of revenues or headcount, and typically has fewer financial resources than the acquirer.

An acquirer may pursue an acquiree for a variety of reasons, such as gaining control of the acquiree’s intellectual property, unique assets, products, or skilled employees. Alternatively, the acquirer may be trying to diversify its operations or move into new geographic regions.

The acquirer will want to buy a majority of the voting shares of the acquiree, so that it can gain operational control over the business. The offer made is frequently at a premium to the current market price of the target company’s shares, in order to convince current shareholders to sell their shares to the acquirer.

Following the acquisition transaction, the acquirer may choose to let the acquiree continue its operations unimpeded, or take steps to extract value from the business by cutting expenses or actively expanding its operations.

Example of an Acquiree

An example of an acquiree is WhatsApp Inc., which was acquired by Facebook Inc. (now known as Meta Platforms Inc.) in 2014. WhatsApp was founded in 2009 by Jan Koum and Brian Acton as an instant messaging app that allowed users to send text messages, voice calls, videos, and images via the internet. Its user base expanded rapidly, and its popularity surged globally due to its ease of use, reliability, and cross-platform functionality. Recognizing WhatsApp's potential and rapid growth, Facebook agreed to acquire WhatsApp for approximately $19 billion in a mix of cash and stock. Upon the deal’s completion, WhatsApp became a subsidiary of Facebook, integrating into its portfolio of applications alongside Facebook Messenger and Instagram. This acquisition enabled Facebook to significantly expand its global messaging market share and reach new users worldwide, particularly in regions where WhatsApp was more popular than Facebook Messenger.