Taboola And Outbrain Call Off Their $850 Million Merger

Taboola and Outbrain have called off a planned $850 million merger which they first announced back in October 2019 and would have valued them at over $2 billion.

The rumors about the cancellation of the merger first appeared in the Israeli press and then confirmed by various sources.

“We’ve seen changing conditions in the market due to COVID-19, and we decided to terminate the deal,” an anonymous person close to the merger said. “It’s been such a long road, and it’s not great…but walking away is the right move.”

According to TechCrunch, another anonymous person familiar with the matter said ‘’No one gets divorced because they’re happy,’’

Outbrain and Taboola had been in talks about the merge since 2015. However, they first announced their plans back in October and there have been a lot of factors between then and now that have affected the merge negatively.

One of them is the Coronavirus pandemic of which the advertising industry has been feeling the negative impacts severely. 

When the plan was first announced in October, the two companies said that Outbrain shareholders would have received shares representing 30% of the combined company as well as $250 million in cash. However, as the market has been negatively impacted, the financiers that were providing capital for the cash component stalled. 

And the deal which expired in August, didn’t get extended. Taboola sought to change the terms and its efforts to turn the deal into an all-stock transaction were ‘’unpalatable’’ to Outbrain, according to TechCrunch. 

A source familiar with the merge said ‘’The cash was a critical factor in the deal.”

In the meantime, while the U.S. Department of Justice decided not to challenge the deal of Taboola and Outbrain, it was delayed by antitrust scrutiny in the United Kingdom and Israel.

What do you think?

Written by Jordan Bevan

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