Facebook Inc will buy fast-growing mobile-messaging startup WhatsApp for US$16 billion in cash and stock, as the world’s largest social network looks for ways to boost its popularity, especially among a younger crowd.

Facebook said yesterday it will pay US$4 billion in cash and about US$12 billion in stock in its single largest acquisition, dwarfing the US$1 billion it paid for photo-sharing app Instagram.

Shares in Facebook slid 5 percent to US$64.70 after hours, from a close of US$68.06 on the Nasdaq.

As part of the deal, WhatsApp co-founder and chief executive Jan Koum will join Facebook’s board, and the social network will grant an additional US$3 billion worth of restricted stock units

to WhatsApp’s founders, including Koum.

Also, Facebook promised to keep the WhatsApp brand and service, and pledged a US$1 billion cash break-up fee were the deal to fall through.

Facebook was advised by Allen & Co, while WhatApp has enlisted Morgan Stanley for the deal.

- Reuters