This article was originally published on TipRanks.com
Meta Platforms-owned Facebook (FB) is closing in on regulatory approval for the proposed acquisition of Kustomer. Citing people familiar with the matter, Reuters reports that the social networking giant could secure E.U. antitrust approval after offering strong remedies. FB stocks fell 1.98% to close at $334.90 on December 16.
Meta Platforms is a social networking company that develops and offers applications to connect through mobile devices, personal computers, and other technologies. Its products include Facebook, WhatsApp Messenger, and Instagram. Meta Platform’s earnings report for Q4 2021 is scheduled for February 2, 2022.
The E.U. antitrust authority is poised to make a final decision on the deal by January 28 of next year. The German cartel office has urged Facebook to seek approval for the deal, having already secured regulatory approval in Britain and Australia.
Some of the remedies that Facebook is offering include allowing rival products to function with Kustomer after the acquisition. The customer service startup offers CRM software for businesses. Its offerings allow businesses to communicate with customers by phone, email, and text messages, among other channels.
The European Commission had initially raised concerns that if the deal is allowed to go through, it could hurt competition. Additionally, there were concerns that the acquisition could strengthen Facebook’s online advertising operations.
In its defense, Facebook insists the acquisition will strengthen competition and, most importantly, bring more innovation to businesses and consumers in the competitive CRM and business messaging spaces.
Earlier this month, HSBC analyst Nicolas Cote-Colisson reiterated a Hold rating on Facebook stock with a $300 price target, implying 10.42% downside potential to current levels.
According to the analyst, FB’s investment case remains a fragile balance between heightened regulation and business opportunities. The Hold rating on Facebook stock stems from the high regulation risk.
Consensus among analysts is a Strong Buy based on 29 Buys and 6 Holds. The average Facebook price target of $406.31 implies 21.32% upside potential to current levels.
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