According to news in the morning of May 30, Beijing time, Meta, the parent company of Facebook, bought Giphy, a GIF dynamic search engine, for $315 million in 2020.
At the time, Adam Mosseri, a Meta executive and chief executive of Instagram, said Giphy was a good company and needed a new owner. Mosley believes that Giphy has an excellent operational team and an impressive number of users, and stressed that the company's acquisition of Giphy is not aimed at user privacy data.
Things have changed. Last week, Meta sold Giphy to Shutterstock, a photo feed site, for just $53 million, an 83% loss from that year's purchase price.
The transfer deal was a last resort, and the UK government antitrust agency ruled that Meta's acquisition of Giphy posed a risk of unfair competition in the social media and online advertising markets, so it had to be sold.
For Meta, the withdrawal of $53 million is almost negligible. Some experts say the current market for mergers and acquisitions is already in the doldrums, and the strong regulation of government agencies, such as vetoing deal agreements or even overturning already completed mergers and acquisitions, has made the market even more "cool".
Sultan Sultan Meghji, a consultant to the US Frontier Fund and former chief innovation officer of the FDIC, says some mergers and acquisitions in the industry are priced at 20 per cent or 30 per cent compared with six months ago and a year ago.
Antitrust regulators in the United States and the European Union are reported to have focused on mergers and acquisitions of large or well-known companies, such as Microsoft's $69 billion acquisition of game developer Activision Blizzard and Amazon's $1.7 billion acquisition of floor-sweeping robot maker iRobot.
The US government has two major antitrust officers, Jonathan Cantor, head of the antitrust bureau of the Department of Justice, and Lena Han, chairman of the Federal Trade Commission. The Biden administration gave the two generals full authority to clean up mergers and acquisitions that could damage fair competition in the market.
So far, the US federal government has initiated antitrust lawsuits, or launched antitrust investigations, including Amazon, Google, JetBlue, Meta, Microsoft and other companies.
Before joining the Justice Department, Cantor worked in the private sector, advising the company's board of directors or management on major mergers and acquisitions to avoid regulatory issues. Lina Han made a splash with an academic article on Amazon's antitrust behavior before she became chairman of the Trade Commission.
Brandon L. Van Grack, a US expert, said the Biden administration had stepped up its scrutiny of mergers and acquisitions and stepped up antitrust enforcement. In fact, the pressure to review mergers and acquisitions in the United States has been increasing year by year before the Biden administration took office.
Some experts say that when large US companies are considering mergers and acquisitions, boards will pay more attention to whether or not to obtain regulatory approval. The frequency of antitrust regulation in the United States is gradually increasing, and the regulatory mechanism is becoming more and more complex.
For the Trade Commission, it is a good thing for enterprises to pay more attention to anti-monopoly supervision. Douglas Farrar, a spokesman for the agency, said that there are still thousands of mergers and acquisitions in the US each year, and if some deals are not approved by the board because they may violate antitrust laws, it is a sign that government agencies have done their job.
It is not just the US Department of Justice and the Trade Commission that have played a role in delaying large mergers and acquisitions. According to statistics from professional bodies, the number of deals publicly disclosed by the Committee on Foreign Investment in the United States (CFIUS) has increased by 50 per cent since 2020.
That figure does not include the number of warnings from CFIUS lawyers about potential mergers and acquisitions and the number of reviews that have not been made public. It is reported that CFIUS generally works in a highly confidential way, with the exception of previous cases such as the public audit of the byte jump of TikTok's parent company, which rarely appears in the public eye.
CFIUS kept a low profile because the large corporate mergers and acquisitions it reviewed could affect US national security. Even a hint from CFIUS could bring a deal to a halt or replace an acquirer that CFIUS prefers.
In late 2022, for example, Binance, an American cryptocurrency exchange, reached a merger agreement with Voyager Digital, a bankrupt cryptocurrency lender. Before that, Voyager first reached an agreement with the cryptocurrency exchange FTX, but FTX suddenly went bankrupt at the end of last year, and Voyager chose a new trading side.
But after the announcement, CFIUS sent a letter saying it would review the deal.
The above-mentioned expert Granke said that in the US government agencies, the CFIUS is a very influential department. The Justice Department could play a more active role in vetting large transactions through CFIUS.
In addition, some M & A deals now have a wide range of international implications, which complicates the approval of acquisitions. It is not just the antitrust department of a country that reviews a transaction. The first question the company now faces when making mergers and acquisitions is how many national and regional antitrust approvals are needed, says Mr Granke.
After that, the trading side needs to consider various regulatory concerns, such as whether it affects market competition and national security, and various variables will lead to the reduction or compromise of trading agreements. In the recent Microsoft acquisition of Activision Blizzard, the British antitrust department simply vetoed it.
As boards or management of large companies consider mergers and acquisitions of all sizes, M & An advisers also need to consider increasingly complex global regulatory demands, and the process is becoming more and more complex, such as whether it will be approved, Mr Granke said. how long will it take to be approved and whether compromises are needed.
The expert said it was becoming increasingly difficult for national regulators to answer questions about large mergers and acquisitions.