Term Sheet

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Instagram deal now worth $948 million

May 30, 2012: 4:48 PM ET

Facebook's share price drop affects Instagram price.

FORTUNE -- Lots of talk this week about how Facebook (FB) is interested in acquiring Norwegian browser developer Opera, with some writing about how it would be the social network's "second $1 billion acquisition." Actually, it would be the first.

Facebook's planned purchase of Instagram is now valued at $948 million, based on Facebook's closing price on Wednesday of $28.19 per share. The deal included a $300 million cash payment, plus approximately $300 million in stock. It was announced in April as a $1 billion deal, which would have valued Facebook shares at $30.43.

At the $38 per share IPO price, the Instagram deal was valued at more than $1.17 billion.

Of course, there remains no guarantee that the Facebook-Instagram marriage will even be consummated, as federal regulators continue to explore possible anti-trust ramifications. In fact, Facebook changed the expected closing date from "in the second quarter of 2012" to the vaguer "2012."

If the deal gets scrapped, Facebook would owe the mobile photo-sharing app a $200 million fee.

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Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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