Elon Musk strikes deal to buy Twitter for $61 billion

Elon Musk clinched a deal to buy Twitter for $US44 billion ($61 billion) on Tuesday (AEST) in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person.

It is a seminal moment for the 16-year-old company that emerged as one of the world’s most influential public squares and now faces a string of challenges.

Elon Musk is buying Twitter.Credit: AP

Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.

Under pressure, Twitter started negotiating with Musk to buy the company at the proposed $US54.20 per share price.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement.

Shares were up about 6 per cent following the news. The deal represents a near 40 per cent premium to the closing price the day before Musk disclosed he had bought a more than 9 per cent stake. Even so, the offer is below the $US70 range where Twitter was trading last year.

The transaction was approved by the board and is now subject to a shareholder vote.

In a prepared statement the company said Musk secured $US25.5 billion of debt and margin loan financing and is providing a $US21 billion equity commitment.

It was not immediately clear what the breakup fee would be or who would run the new company.

Twitter’s outsized importance as a mouthpiece for politicians, political dissidents and activists belies its relatively small size.

The White House declined to comment on the deal, but said that US President Joe Biden has long been concerned about the power of social media platforms.

Although it is only about a tenth of the size of far larger social media platforms like Meta’s Facebook, it has been credited with helping spawn the Arab Spring uprising and accused of playing a role in the January 6, 2021, storming of the US Capitol.

After Twitter banned former president Donald Trump over concerns around incitement of violence following last year’s US Capitol attack by his supporters, Musk tweeted: “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”

Earlier, Republicans cheered the news of a possible Musk buyout of Twitter, betting on Trump’s reinstatement on the service.

Trump, whose company is building a rival to Twitter called Truth Social, said he will not return to Twitter, according to a Fox News interview.

Reuters

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